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California Residential Investment: 34% of all home acquisitions were by investors in Q2

The residential investment landscape hasn’t wavered much as the summer progresses. A recent analysis by CoreLogic underscores the consistency in home investor involvement over the recent months.

In June, residential investors were responsible for 26% of all single-family home acquisitions, marking a slight dip of 1% from March figures. CoreLogic’s Thomas Malone believes this minimal drop, rather than signifying a declining trend, indicates that the role of investors in the residential sector will likely remain dominant in the upcoming periods.

Reflecting on the past year, Malone noted, “2021 witnessed a remarkable uptick in investor participation. On average, their market share in 2021 was a notable 8% higher than the previous year.” While there has been a slight tapering in this activity in the early months of 2023, the reason appears to be more seasonal. “Typically, the summer months see a rise in owner-occupied buyers, which can explain the recent dip in investor purchases,” Malone added.

Regional trends for the second quarter show the South and Southwest areas having the most significant investor presence. In California, a staggering 34% of all home acquisitions were by investors, topping the list. Following closely were the District of Columbia at 33% and states like Georgia, New Mexico, Texas, and Nevada, all with numbers hovering around 30% to 32%.

An emerging pattern worth noting is the rise of smaller investors in the market share, even as the total investor purchase count dips slightly. Large investors, owning between 100 to 999 properties, and “mega-investors” with 1,000 or more properties, consistently held between 8% to 10% market shares throughout 2023. This was especially noteworthy for mega-investors, who, in the past, maintained over 10% share for significant durations in 2021 and 2022, even reaching a high of 17% in June 2022. In a contrasting trend, smaller investors, with ownership ranging between three to nine properties, represented 47% of investor acquisitions, marking their most significant presence since 2011.

LoanGuru Mortgage Insights Team

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