How to Shop Smart in a Market Investors Are Circling

If you’re trying to buy your first home right now, you may have noticed that investors are still active in many markets.

According to Cotality’s latest report, investors accounted for 30% of single-family home purchases in September, up from 29% in June. Homes are also taking longer to sell, with the national median days on market climbing to 42 days this fall. And nearly one in four sellers nationwide have cut their asking price as buyer demand has cooled.

This isn’t the bidding-war environment of 2021; it’s a slower, more negotiable market where investors are being selective instead of aggressive. That shift creates real openings for first-time buyers, even in neighborhoods where investors are showing up in force.

You bring something to the table that investors don’t

Investors focus on spreadsheets, cap rates, and renovation math. They rarely waste time on homes that need cosmetic work or homes that don’t make sense as rentals. You can. A slightly dated kitchen might turn off an investor who prefers low-maintenance, high-yield properties, but you may see a home you can grow into.

Many sellers also care about who is buying their home. Owner-occupants often look more reliable than investors because they are more motivated to finish the deal. A seller who has watched their home sit for 40 days may prefer a committed first-timer over an investor who is still negotiating pennies.

You don’t need to “beat” investors at their own game. You only need to understand why they pick certain homes and to look at the opportunities they leave behind.

Preparation matters more than perfection

The best thing you can do right now is be financially ready. A full underwriting, rather than a basic pre-approval, can give you a stronger position when you make an offer. Sellers take a buyer with solid financing more seriously, especially as the market becomes more price-sensitive.

You also don’t need a perfect house. You need a house that fits your budget and your life. If you’re open to older homes, smaller yards, or homes with cosmetic issues, you’ll have more options than the buyers and investors who only want “plug-and-play.” Specialty home loans for if you buy a fixer-upper also exist.

Expanding your search radius is another way to uncover opportunities. The next neighborhood over may have similar charm and amenities without the intense competition.

Let the slower pace work for you

Homes are not disappearing in 48 hours anymore. You can breathe. You can look. You can think. You can ask questions. This part of the market cycle gives you room to decide whether a home truly fits your future.

If you love a home but not the price, this is the kind of environment where negotiation becomes realistic. Nearly one in four homes nationwide saw a price cut this fall, a sign that sellers know demand has cooled and they need to meet buyers in the middle.

Investors are patient and calculated, not emotional. You can be patient too, but you also bring heart and commitment to the table.

How first-time buyers can break into investor-heavy neighborhoods

Here’s the practical section you asked for: a clear, realistic look at how someone new to the market can still get into a neighborhood that investors are targeting.

1. Look for properties that investors skip

Many investors avoid homes with older HVAC systems, dated interiors, or odd layouts. These homes still offer solid value for owner-occupants who are planning to stay long-term. If a home has been on the market longer than average, that is often a sign investors have passed.

2. Target homes with HOAs or owner-occupancy rules

Neighborhoods with HOAs sometimes limit the number of rentals. Investors usually avoid these because they prefer flexibility. You may find more owner-occupant competition, but fewer cash-heavy investors.

3. Make your offer as clean and reliable as possible

You can’t offer cash, but you can:

• Be fully underwritten
• Avoid unnecessary contingencies
• Offer flexible closing dates
• Present yourself clearly as the future occupant

Sellers often appreciate certainty — and sometimes knowing who their home will go to — over the highest theoretical price.

4. Build a local team that knows the area

A local real estate agent with experience in investor-heavy neighborhoods will know which streets, home types, or micro-sections are more owner-friendly. They can spot overlooked homes before the broader market catches on.

5. Consider light cosmetic fixes instead of full remodels

A home that needs paint, carpet, fixtures, or landscaping is unattractive to investors but ideal for first-time buyers. These updates are low-cost and high-impact, and the homes are often priced lower because investors don’t want a project that eats into their margins.

6. Know the rental math, even if you’re not renting

If a home doesn’t make financial sense as a rental, investors usually won’t touch it. That means you may have less competition. Understanding what isn’t attractive to investors can help you spot affordable openings.

A long-term mindset helps cut through the noise

Investors are thinking years ahead when they buy. You should do the same, not because you’re trying to compete with them, but because homeownership is fundamentally a long-term decision. You’re not buying for a return. You’re building stability, routine, and equity over time.

Even in markets where investors are present, there are homes they can’t use, don’t want, or can’t justify financially. Those homes are where first-time buyers gain ground.

The bottom line

Being a first-time buyer in a market where investors are active is challenging, but it’s not a dead end. You have more leverage, more time, and more opportunity than it may appear. Sellers are adjusting. Price cuts and longer days on market are giving buyers room to negotiate. Inventory is rising. And investors, for the most part, are being selective rather than aggressive.

If you prepare well, stay patient, and look where others aren’t, you can absolutely break in. And when you do, you’ll be investing in something far more important than a portfolio entry: your future.