JACKSONVILLE, Fla. – The News4JAX I-TEAM has new insight into why the price of rent is skyrocketing.
The Jacksonville area is now ranked one of the top five metro areas in the U.S. where investors bought the highest share of homes in 2021, according to the real estate company Redfin.
An analysis by the Washington Post of the data shows Jacksonville was ranked fourth. Only Atlanta, Charlotte and Miami beat out Jacksonville in the number of investors buying homes, followed by Phoenix, which is ranked No. 5, and Orlando, ranked sixth.
News4JAX Insiders reacted to Jacksonville’s new ranking.
“I’m 100% against it, because the investors will buy them, and hold them forever turning your area into nothing but rentals,” wrote Displayname.
Truthteller wrote: “Great for sellers but not so good for buyers. Investors are paying cash for these houses which in many cases is a better option because of less red tape and risk than a person who has to get financing.”
According to the data, 22% of homes purchased in Jacksonville were bought by investors. That is higher than its 2015 rate of 11%.
Round Table Realty broker and owner Howard Flaschen says investors seized on the opportunity during the pandemic.
“I think that investors had the foresight to know that they could move the market, they could put a floor under the market, and they can actually put a lot of the demand into the supply-demand equation. And next thing you know, prices go up, they stabilize, and investors can earn a very large yield in comparison to where they can get it elsewhere,” Flaschen said.
But Flaschen and his team say some builders are rejecting offers from out of state investors and instead accepting offers from large local corporations, local companies or wealthy people.
“And because the builders are aware of this, the builders are now not allowing investors to buy new construction,” said Realtor Erica Jolles, with Round Table Realty. “Because when investors come in, and they’re buying all of these properties, it changes the makeup of these neighborhoods, and then it ultimately down the road can affect the long-term value of everyone’s properties.”
Redfin also points out that investors are buying more homes in undervalued and rural communities in the Jacksonville area, like the Northside, Westside and all the way south to Middleburg.
All of this is happening at a time when buyers are seeing rising rent prices in every ZIP code across the country.
What do you think about out-of-state investors buying local properties and do you think this has affected the price of your rent?