Investor influence on home sales continued to grow as 2025 started.
My trusty spreadsheet reviewed stats from Cotality – the new name for the CoreLogic data crunchers – tracking 26 California metropolitan areas and single-family home sales that either went to primary residents or investors. These investments include homes bought as rentals and as second homes.
In 2025’s first half, 36% of purchases statewide were made by investors – up from 31% for all of 2024 and 16% at the recent low in 2020 as coronavirus was scrambling the economy.
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Or look at the change this way: Investors were tied to an average of 33% of all California homebuying in the past 18 months vs. 21% in 2015-23.
The sharp jump in investor activity is likely due to their financial strength, which can often combat the state’s legendary low affordability that frustrates the common house hunter.
Overall, California’s homebuying has collapsed. Over the past three years, sales have followed a pace similar to that of the 2008 crash, when the global economy plunged into the Great Recession.
However, imagine a market with far fewer investors. That would likely mean California prices would be tumbling this year.
That would be bad news for all owners, regardless of whether they are investors or not. Lenders would not be happy either, as the equity that backs their mortgages would shrink.
But house hunters would largely cheer. They might have less competition for homes on the market. Plus, those discounts would help improve the market’s painfully low affordability.
Remember, the California Association of Realtors estimates that just 15% of households statewide could qualify to buy a typical house at mid-year 2025.
Investors: Big or small?
You can also see the affordability crisis play out by eyeballing which investors remain aggressive buyers.
The investors with the fewest homes under their control remain the largest group of buyers. Yet their clout has slimmed. It’s a good bet that’s because even some of these wealthy real estate enthusiasts can’t stomach the market’s stubbornly elevated prices and mortgage rates.
What Cotality identified as the smallest investors – those who own fewer than 10 homes – represented 15% of all California homes sold during the past 18 months vs. 13% in 2015-23.
The medium-sized investors – owning 10 to 99 homes – accounted for 8% of the past 18 months’ sales, compared with 5% over the previous nine years.
“Large” investors – owning 100 to 999 homes – were 6% of the market in the past 18 months vs. 3% in 2015-23. And the “mega” investors – owning 1,000 or more homes – were 4% of purchases the past 18 months vs. 0.6% in 2015-23.
Another view
Alternatively, contemplate these groupings as slices of only what the investors purchased. This calculation shows how the small fry investor is relatively moderating their interest in California houses.
The smallest investors accounted for 46% of all investment purchases over the past 18 months, but that’s down from 63% in the previous nine years.
Plus, the share of medium-sized investors only inched up to 25% of investment buying from 24% in 2015-23.
Contrast those swings to large investors capturing 18% of all investments from 13%. And the “mega” investors grew to 11% from 3%.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]