
A recent report from CoreLogic reveals a notable decline in the number of homes purchased by investors, reaching levels not seen since the onset of the pandemic.
This trend is consistent with the broader difficulties currently facing the housing market.
Current Market Challenges
In 2024, home sales have struggled significantly, falling short of historical benchmarks.
Rising property prices, soaring mortgage rates, and a continued scarcity of available homes have dampened activity for both buyers and sellers.
Traditionally, real estate investors have managed to weather market fluctuations fairly well, often opting to buy properties outright with cash.
Yet, this year has shown a marked decline in their home purchases as well.
CoreLogic’s analysis highlights a direct link between investor acquisitions and overall home sales, with a shrinking percentage of transactions involving investors.
Many investors have recently begun to regard real estate as a less attractive asset compared to earlier periods.
As the pace of price increases slows, fewer are participating in property flipping—particularly challenging in a stagnant market.
Moreover, the presence of iBuyers has sharply diminished.
Shifts in Investor Behavior
This change stands in stark contrast to the surge in investor activity noticed in the immediate aftermath of COVID-19, when investor transactions surged alongside owner-occupied sales.
In June 2021, the peak saw a remarkable 148,670 homes purchased by investors.
As of September 2024, the figures have declined to 75,442 investor acquisitions.
While this marks a slight rebound from the recent post-pandemic low, it still reflects a significant 22.5% drop when compared to September 2023.
Notably, investors are now claiming a smaller proportion of homes across nearly all states in the U.S. The exceptions include Oregon, which experienced a modest gain of 0.2%, and South Dakota, where a 3.4% increase was reported, likely due to its limited real estate activity.
Regional Highlights
Regionally, Texas has become a hotspot for investor purchases.
From January to June this year, cities such as Dallas (31,140 acquisitions) and Houston (25,820 acquisitions) led the charge, while San Antonio (10,163) and Austin (7,879) also ranked among the top 20 markets nationwide for investor transactions.
Among the leading metropolitan areas, Los Angeles recorded 41.5% of its purchases by investors, followed by Atlanta (35.9%), Riverside, California (34%), Las Vegas (32.1%), and Seattle (30.5%).
The national average for investor purchases as of September stands at 25.3%.
In summary, while investor activity witnessed a revival in the immediate post-COVID period, the current landscape presents a stark contrast, with both challenges and shifts in the purchasing behavior of real estate investors.
Source: Housingwire