On 'American Dream Home,' a couple seeks a permanent Florida vacation

A lot of data is coming out that's pointing to a potential slowdown in the housing market.

One of the largest price appreciation stories we've seen since the pandemic began is in Florida.

We took another look at the market this week on "American Dream Home," when Terrie and Rafael searched the Cocoa Beach area for their new residence.

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It's just an hour east of Orlando — and prices there are still up about 20 percent over the last two years. 

Sales have been breaking records, but it is not just potential homeowners that have affected prices in this area — it's Wall Street.

Realtor.com says that the median home price back in 2007 was $409,000. 

The average median listing price in April 2022 was $829,900. 

This time frame includes the Great Recession caused by the Wall Street scandal of 2008. And it looks like Wall Street is back in the game when it comes to Florida real estate.

Wall Street investors are looking for profit — and stocks right now continue to head south.

Reports indicate that investment funds backed by Goldman Sachs have sunk at least $45 million into an entire rental home community in Brevard County, where Cocoa Beach is located. 

The spending spree in part is likely due to stock market volatility. Wall Street investors are looking for profit — and stocks right now continue to head south. The Dow year to date is down 9.4%.

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Nadia Evangelous, NAR's senior economist and director of forecasting, tells me that Florida is at the top on the list for Wall Street. 

"Indeed, Florida is one of the states with the highest share of purchases by institutional investors," she said. 

"Sixteen percent of the home purchases were made by institutional investors statewide in 2021. These are buyers from Wall Street or a hedge fund or someone outside the scope of a traditional buyer. These are not mom-and-pop investors."

She says the end game is profit for these funds — and there are several similar investment vehicles like those backed by Goldman Sachs. 

"They buy homes and communities on a large scale and look to make profits from them, by turning them to rental properties."

"Meanwhile, our study shows that these buyers tend to purchase homes in areas that have larger millennial, renter and minority populations. They also invest in popular areas that attract new residents."

"Buyers tend to purchase homes in areas that have larger millennial, renter and minority populations."

She says the news is not good for areas like Cocoa Beach. 

"The main impact of institutional investors is on market competition. While these buyers typically purchase properties below the state median price, institutional investors take a significant portion of homes that would otherwise be sold to first-time and lower-income buyers."

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Corcoran Group associate Julian Johnston joined me last week on "FOX Business Tonight." She said that a lot of investors are looking for property, in part because the stock market is too volatile and rental rates are up 30% in 12 months, which means they are getting a good return — and investors are still buying properties.

They can lock up money 3 to 5 years in these properties and get a guaranteed return — something the stock cannot provide right now, considering a recession is looming in the second half of 2022. 

Additionally, new building is 2 to 3 years away at least.  

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Yet Evangelous contends the news is not all bad for buyers looking to make the Sunshine State their home. 

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"It’s very promising to see that more homes are built statewide," she said. 

"Single-family permits rose about 26% in 2021 compared to the previous year. This translates to nearly 30,000 additional single-family homes."

To learn more about one couple's search for their "American Dream Home," watch the video at the top of this article, or click here to access it.