A recent report found 27% of all US homes sold in Q1 2025 were purchased by investors – the highest share in at least five years. That number was 18.5% between 2020 and 2023.
However, the number of homes bought is only a 1.2% increase YoY, showing that investors aren’t necessarily buying more homes this year, but there are less traditional buyers in the market and fewer sales overall.
What’s even more interesting is the vast majority of these investors (85%) are mom-and-pops, owning only 1-5 properties! Meanwhile, big investors shows a massive retreat as they sold 76% more properties than they purchased in Q1.
It seems both traditional homebuyers and the large institutional investors are slowing down and these smaller investors are taking advantage of it. After many years of bidding wars and rising prices, it seems now is a better time to purchase an investment property, especially if you’re looking to get a good deal and have the resources to put some work into the home.
Of course these numbers vary by area, so let’s look at California.
According to this article, three states dominate investor ownership, accounting for nearly 25% of all investor homes nationwide: Texas (1.66M), California (1.45M), and Florida (1.21M). However, this is purely according to volume which is unsurprising considering these three states are the most populous. Looking at the percentages, Hawaii and Alaska have higher shares of investor ownership with 39.9% and 35.5% respectively.
This article expands on how California counties with low populations, where second home ownership is more common due to tourism and recreational opportunities, have the highest percentage of investor-owned homes. These include Sierra County, with a whopping 82% of single-family houses owned by investors, Trinity County (77%), Mono County (74%) and Alpine County (68%).
Counties with major cities and more expensive real estate have more modest shares of homes owned by investors: San Diego, Orange County, Los Angeles, Santa Clara, and San Francisco all sit at only 15%.
Takeaway: San Diego real estate isn’t overrun by investors quite yet, but if you’re thinking of buying an investment property out of state where it’s more affordable, you’re not alone.
By Natalie!
I don’t understand why investors would be buyjng when the market is flat. If you buy, realtor costs are baked in. While you own you’ll need to pay taxes. When you sell realtor fees become more real.
You need properties to go up in value or price enough to offset the costs. When properties are increasing 20%+ yoy then its a great investment. But if the market is flat or going down housing is a poor investment. You’d be better off with bonds or treasuries.
I think what happens is realtors are often also investors. They dont know anything else. When property values go up they’re flush. When property values go down they just keep upping the leverage until banks call them out and BK.
There has to be some of that generational wealth transfer fueling it.
Income property in another state is an excellent first step to leaving California. Shuffling assets from the clutches of Sacramento is a special dance. If you plan well you can use the three of five rule twice in three years.
People look for, find their retirement property and purchase here before they are ready to retire. They buy it to lock up a good property and hedge against future price increases. They dont care if it goes up or even down a bit in those cases or if it cash flows. They just do it as part and parcel of their plans