Real estate investors are turning away from the once red-hot Florida housing market, according to a new Redfin study, as the end of the state’s pandemic-era boom, together with rising costs, have made it much less appealing or profitable.
Why It Matters
Investor activity is sluggish at the national level, as the U.S. housing market has remained largely frozen over the past few months.
Sellers currently outnumber buyers by more than 600,000, but this widening gap has not yet led to a decline in home prices. Instead, home price growth has simply slowed down. Many would-be buyers still cannot afford the homes for sale on the market; others are waiting for mortgage rates to come down further.
The same uncertainty crippling would-be buyers is affecting investors, who are nervous about not making a profit from their purchase under the current market conditions. Almost one in 10 homes sold by investors in December sold at a loss, up from 7.1 percent a year earlier, Redfin reported.
What To Know
Investor home purchases were up 2 percent from a year earlier in the fourth quarter of 2025, according to Redfin, for a total of just under 500,000. Under the umbrella of “investor,” the real estate brokerage put both institutional and mom-and-pop investors.
It was the eighth straight quarter of minimal changes in investor activity, showing how significantly things have changed since the pandemic homebuying frenzy.
But in Florida, investor activity was down by the double digits, especially in some of the markets that overheated the most during the pandemic.
Their purchases fell 16 percent year over year in Orlando, Florida—the biggest decline of any of the 38 most populous U.S. metropolitan areas Redfin analyzed. Fort Lauderdale, Florida, followed with a decline of 15 percent—trailed by Las Vegas, Nevada (-12 percent); Nashville, Tennessee (-9 percent); and Jacksonville, Florida (-7 percent).
The main reason Florida is seeing such a downturn in investor activity is the dramatic cooldown the state has experienced after the end of the pandemic. The state had boomed during the health emergency, when the rise of remote work and low borrowing costs led to a surge in demand from both residents and newcomers.
But after mortgage rates more than doubled, employers issued return-to-office orders, and home prices shot through the roof, demand cooled down in the state. Dwindling demand, combined with a surge in inventory over the past few years driven by new construction, led to months of year-over-year price declines in the state.
That means Florida is now a tougher market for investors to flip a home and earn money. But there are also other Florida-specific reasons that are making the state less appealing to investors.
For one, home insurance costs and homeowners association (HOA) fees have skyrocketed over the past few years, making it harder for investors to turn a profit. For investors thinking of renting out their properties, making a profit has also become less of a certainty as rents are down from their peaks in much of the state.
But investors are not snubbing Florida altogether. In West Palm Beach—the so-called Wall Street South, where luxury home sales are booming—investor purchases were up 17 percent year over year in the fourth quarter of 2025. While luxury pending home sales fell 3.6 percent from a year earlier in January nationwide, in West Palm Beach they jumped by 30 percent, based on Redfin data.
Outside Florida, investors are looking at expensive West Coast cities to make a purchase. In Seattle, investor home purchases were up 37 percent year over year in the fourth quarter of 2025—the biggest increase of any major U.S. metro area.
Next was Portland, Oregon (up 27 percent); Milwaukee, Wisconsin (up 24 percent); San Francisco, California (up 24 percent); and Providence, Rhode Island (up 20 percent).
What People Are Saying
Chen Zhao, Redfin’s head of economics research, said in the report: “Some investors are keeping their pocketbooks closed, which eliminates competition for everyday first-time buyers.
“The pandemic-era investor frenzy that crowded out so many first-time homebuyers has largely fizzled. There are still obstacles for buyers, like high costs, but investors are no longer one of them—at least in many parts of the country.”
What Happens Next
President Donald Trump has proposed banning some institutional investors from purchasing additional single-family homes in the U.S. housing market, though experts are skeptical of whether this will actually help increase inventory levels for everyday buyers and improve affordability.
According to the Redfin study, investors purchased 18 percent of homes that sold in the fourth quarter of 2025, a rate unchanged from a year earlier.
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