These are challenging times for real estate investors. In March, about 1 in 7 homes — 13.5% — sold by investors nationwide did not even recoup the price the investor originally paid for the property, according to a recent Redfin analysis.
And things were a little worse than that in February, when 14.5% of investment homes were sold under the original purchase price.
It is quite a change from last May, when a record low of just 2.8% of homes sold for less than investors paid for them. Redfin, a brokerage firm, defines an investor as any institution or business purchasing residential real estate.
The numbers are especially bad in some markets. In one major city, nearly one-third of investment properties were sold for a loss in March.
Following are markets where home price declines are crushing investors.
5. Charlotte, North Carolina
Investment homes in this metro area that were sold at a loss in March 2023: 17.4%
Charlotte is one of “10 Places Where Home Prices Have Skyrocketed Since the Pandemic.”
However, those rapid price gains have made houses much less affordable — for both traditional homebuyers and investors — now that mortgage rates are higher.
4. Sacramento, California
Investment homes in this metro area that were sold at a loss in March 2023: 20.2%
The chilly wind investors are feeling in otherwise warm Sacramento probably is a result of the city’s place among the “10 Housing Markets That Are Cooling Fastest.”
3. Jacksonville, Florida
Investment homes in this metro area that were sold at a loss in March 2023: 20.9%
Home loan costs have jumped in the past year, making it much more difficult for some investors to afford properties.
That is especially true in places like Jacksonville, which is among the “15 Cities Where Homebuyers Are Most Impacted by Rising Interest Rates.”
2. Las Vegas
Investment homes in this metro area that were sold at a loss in March 2023: 28%
Over the past decade, Las Vegas recorded one of the biggest percentage gains in home prices among the top 190 U.S. metros.
But as with many markets in the West, Las Vegas is now undergoing a correction, and investors are feeling that pain.
1. Phoenix
Investment homes in this metro area that were sold at a loss in March 2023: 30.7%
Investors in Phoenix are taking it on the chin as nearly one-third of investment properties sold for a loss last month.
Right now, Phoenix is among the “4 Places Seeing Their Worst Home Price Declines in Over a Decade.”
