R
eal estate investors are retreating from Florida at a faster pace than the rest of the US, as the state's property crisis deepens. According to Redfin, three out of the top five areas where investor purchases have dropped significantly are located in Florida. The state's allure for investors has waned due to declining affordability and increased risks from natural disasters.

    Florida's cities, including Orlando, Miami, and West Palm Beach, have seen significant drops in home purchasing activity. Investor purchases fell by 27.5% year-over-year in Orlando, the largest decline among major US metros. The state's investor market share also plummeted, with a 6.9 percentage point drop in Orlando, the biggest decline nationwide.

    Investors are abandoning Florida due to an uncertain economy and high mortgage rates, making it challenging to earn a profit from real estate investments. Coastal areas are particularly affected by rising HOA fees, flood insurance costs, and increasing natural disaster risks. With a record-high inventory of unsold homes in January, investors face intense competition when trying to sell.

    New legislation passed after the 2021 Surfside building collapse has led to increased costs for condo owners, further deterring investors. Rising insurance costs and HOA fees have also driven up expenses for homeowners. Across the US, real estate investor purchases reached a six-year low in the fourth quarter of 2024, with just 47,004 homes purchased.

    High mortgage rates, inflation, tariffs, and job uncertainty are all contributing to a decline in investor activity. Even cash buyers are hesitant due to home-flipping costs and other expenses. The outlook for earning a profit from real estate investments is bleak, leading many investors to pull back on housing.