Real estate investors are quietly pulling out of these markets, while others are still booming

In 2021, institutional real estate investors accounted for about 9.3% of all home sales, a sharp increase from 5% in 2020. Although the rate has leveled off since 2021, it remained at 6.6% in 2024 and 2025.

The steady rate is a strong indication that institutional investors continue to believe there are robust profits to be made—as long as they invest in the right metros.

Thanks to recent year-end reports and other timely data releases, real estate professionals have some clarity on which metropolitan areas are popular for investors. Just as importantly, data shows the metros that may not be sound investments in 2026.

To compile this list, PropertyReach combined information from ATTOM Data Solutions, Redfin, and the National Association of Realtors to identify the five hottest and coolest markets for institutional investor purchases. The hottest markets for investors are based on complete 2025 data, while the coolest markets are based on the third quarter of 2025, the latest information available.

Unsurprisingly, the five U.S. metros with the highest percentage of institutional investor purchases in 2025 are in the Sun Belt, which has seen strong growth during the past few years. The following areas ranked highest among the nation’s 133 most-populous metros.

1. Memphis, TN

• 2025 Rate of Sales to Investors: 14.8%

• 2025 Median Sales Price: $292,600

Nearly 15% of Memphis’s 2025 home sales went to institutional investors, the nation’s highest rate. Nashville passed the Home of the Blues in 2017 to become Tennessee’s most populous city. Investors continue to take advantage of affordable listings and high inventory in Memphis.

2. Huntsville, AL

• 2025 Rate of Sales to Investors: 11.9%

• 2025 Median Sales Price: $324,200

The Rocket City is now Alabama’s largest, having surpassed Birmingham’s population sometime in the early 2020s. The area features a highly transient and educated populace.

3. Fayetteville, NC

• 2025 Rate of Sales to Investors: 11.4%

• 2025 Median Sales Price: $260,700

Another area with a transient population, Fayetteville in eastern North Carolina, also had a large percentage of 2025 home sales go to institutional investors. Low prices help entice investors to the area.

4. Birmingham, AL

• 2025 Rate of Sales to Investors: 11.2%

• 2025 Median Sales Price: $330,200

Alabama’s largest metro saw nearly the same percentage of 2025 investor home sales as Huntsville, its neighbor to the north. The moves might already be paying off for institutional investors, as the Birmingham-Hoover area saw the highest median home sale price increase (12.3%) in 2025.

5. Dallas, TX

• 2025 Rate of Sales to Investors: 11.1%

• 2025 Median Sales Price: $376,100

The Dallas-Fort Worth metro area continues to be an attractive destination for homebuyers, and investors have similarly shown no signs of abandoning the area. Strong, steady job growth has fueled the robust market.

As strong as the Sun Belt real estate market remains overall, a few pockets have softened for sellers. Below are the U.S. metros with the sharpest decrease in investor home sales from the third quarter of 2024 to the same period in 2025.

1. Las Vegas, NV

• YoY Decrease in Q3 Home Sales: -20%

• 2025 Median Sales Price: $483,300

After years of a red-hot real estate market, it appears Las Vegas and its surrounding areas in Clark County are coming to a balance. The Las Vegas market is always volatile due to its tourist-driven economy, and more investors seem to be cashing in their chips and walking away.

2. Orlando, FL

• YoY Decrease in Q3 home sales: -18%

• 2025 Median Sales Price: $445,000

The story is much the same in Florida, where homebuyers came in droves during the early days of the pandemic. As more companies instituted back-to-work policies, the growth slowed and is stabilizing now.

3. Miami–Fort Lauderdale, FL

• YoY Decrease in Q3 home sales: -14%

• 2025 Median Sales Price: $640,000

Even Florida’s largest metro is not immune to the massive self-correction happening in the regional real estate market. Many investors are realizing that the profit margins are now what they were in 2021 and 2022; the 14% decrease in the Miami area is evidence of that trend.

4. Denver, CO

• YoY Decrease in Q3 home sales: -9%

• 2025 Median Sales Price: $653,800

Typically a stable market, Denver’s median home prices have slowly dropped over the past few years as buyers gain leverage.

5. Charlotte, NC

• YoY Decrease in Q3 home sales: -7%

• 2025 Median Sales Price: $425,800

Another Sun Belt metro with decreased investor activity is Charlotte. The trends in the Queen City are mostly in line with the national ones, and sellers are having to contend with a strong supply of new homes and apartments.

Even as the national real estate market continues to slowly turn in buyers’ favor, investors have plenty of opportunities to make strong profits in the right metros. Items to look at during your search include:

Reminder: Real estate trends don’t last forever. The COVID-19-era seller’s market was bound to correct, but smart sellers could slowly tip the pendulum back in 2026. Keeping up with the latest information and thoroughly investigating neighborhoods remains vital for real estate investors of all sizes.

This story was produced by PropertyReach and reviewed and distributed by Stacker.