As mortgage rates soar, the market conditions that made entering the real estate investment arena such a sexy proposition are largely beginning to dry up, and the dramatic rise in rental prices is beginning to slow down.
In some areas of the country, investors are competing directly with first-time buyers and other homebuyers and often winning bidding wars, but investors have pulled back in a hurry.
If buyers weren't competing with so many cash-rich competitors, they might have a better chance of buying the homes they want to live in in these markets.
Sophisticated investors with more capital reserves will be more inclined to buy with cash.
Rising home values over the past few years have pushed many of these investors out of prime coastal real estate markets and into smaller cities.
That includes places like Boise, Nevada, where home values have traditionally been more affordable than in urban centers like New York City, Boston, Chicago and San Francisco.
However, those places that investors flocked to are now the places where investors are pulling back the most.
The geography has begun to shift, and investors will focus on markets that are cheaper.
According to seasonally adjusted data from Optimal Blue, a mortgage data clearinghouse, the percentage of investors using mortgages to buy rental properties or flip homes nationwide was at its lowest level in three years as of October.
Fewer than 1 in 17 mortgages were used for investment purchases, down from 1 in 12 less than a year ago.
Many older people investors who are smaller and don't have as much cash as institutional investors - that is, big banks, hedge funds and other large financial firms - typically use mortgages to buy homes.
Some of these homes are then used as rentals, which can be very lucrative in places where housing costs are low but rents are high and rising.
Or they buy properties that need repairs, hold them for only a few months (paying both the mortgage and the cost of needed repairs, updates or upgrades), and then sell them for a huge profit.
But in today's cost-squeezed market, it's much harder to make those numbers work.
For example, an investor buyer looking to borrow $400,000 last year to buy a rental property with a 3.5% mortgage rate on a 30-year fixed-rate loan would need to earn about $1,800 per month to cover his investment.
If that same hypothetical investor were to borrow $400,000 at today's mortgage rate of about 7%, it would take about $2,700 to cover the monthly payments.
In many places, renters simply can't afford a $900 rent increase, so the investment no longer makes sense.
When things change, investors jump back in. This means some combination of lower borrowing costs, significantly lower prices, or the ability of tenants to pay much higher leases.