Jacksonville Among Top Five Markets For Institutional Home Purchases
According to a new report Jacksonville ranks among the top five markets in the nation with the highest percentage of personal properties being bought by institutional investors.The ranking is according to RealtyTrac's Residential and Foreclosure Sales Report for October, released this week.
In Jacksonville, more than a fifth, or 22.2 percent, of the residential properties sold last month went to investor groups.
Raymond Rodriguez, market consultant and owner of the Real Estate Strategy Center of North Florida, says investors are passing on $80,000 starter houses in favor of $200,000 and $300,000 single family homes in nice neighborhoods.
“They know the future of the real estate market is mainly rental, so what they’re doing is they’re targeting the people who have lost their homes to foreclosures and want to maintain their quality of life in established neighborhoods," he said. "They’re buying homes in these neighborhoods to rent them to these individuals."
Because the investors are paying cash, Rodriguez says, the banks are selling the properties at a discount just to get them off the books.
But what’s good for banks and investors is not so good for the people who live in those neighborhoods.
Not only are property values being kept artificially low, but Rodriguez says the trend means more renters who care less about the neighborhoods they are living in.
"It’s going to change the landscape of the housing market,” he said.
Rodriguez expects the trend to continue as long as unemployment remains high, which could be another five years.
The top five markets with the highest percentage of institutional investor purchases, according to RealtyTrac's October 2013 U.S. Residential & Foreclosure Sales Report:
- Memphis — 25.4 percent
- Atlanta — 23 percent
- Jacksonville — 22.2 percent
- Charlotte — 14.5 percent
- Milwaukee — 12 percent
You can follow Cyd Hoskinson on Twitter @cydwjctnews.