{"id":157866,"date":"2023-09-06T11:06:27","date_gmt":"2023-09-06T17:06:27","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=157866"},"modified":"2024-02-29T17:54:03","modified_gmt":"2024-03-01T00:54:03","slug":"real-estate-investor-activity-drops-to-pre-pandemic-levels","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/real-estate-investor-activity-drops-to-pre-pandemic-levels","title":{"rendered":"Real Estate Investor Activity Drops To Pre-Pandemic Levels\u2014Should You Jump Ship Too?"},"content":{"rendered":"\n

Investor activity in the residential housing market is down sharply. Recent data from Redfin <\/a>shows the number of homes purchased by investors down 45% from the second quarter of 2022 to the second quarter of this year.<\/p>\n\n\n\n

A drop of 45% is massive and notable, especially when compared to the rest of the market. Home sales have dropped across the board, but only about 31%. This means that investor demand is falling considerably faster than that of homebuyers. <\/p>\n\n\n\n

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YoY Growth in Investor Purchases (2000-2024) \u2014 Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n

You can see this trend reflected in the graph, which shows, on a national level, the total share of residential properties purchased by investors. During the pandemic, strong investor demand saw investors scoop up the largest share of properties on record\u2014peaking at around 20%. Now, as investor demand falls faster than homebuyer demand, this share has dropped to 16%.<\/p>\n\n\n\n

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Investor Market Share Among All Home Purchases (2000-2024) \u2014 Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n

Having 16% of properties bought by investors is still a higher number historically, but it\u2019s equal to where things stood before the pandemic. This is a broad trend, but of course, there is variation. <\/p>\n\n\n\n

The most notable way to slice the data (other than by location, which we\u2019ll get to in a minute) is by price tier: <\/p>\n\n\n\n

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Investor Market Share by Price Tier (2000-2024) \u2014 Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n

It seems that much of the run of investor activity during the pandemic was from mid-priced homes\u2014but in recent months, it has come all the way back down to about pre-pandemic levels. Meanwhile, although they\u2019ve come down a bit, low- and high-priced homes remain well above pre-pandemic levels. <\/p>\n\n\n\n

So investors’ activity, in terms of market share, is back to roughly pre-pandemic levels. However, if you look at just the gross volume of properties purchased, it\u2019s at the lowest level seen since 2016.<\/p>\n\n\n\n

\"chart
Number of Investor Purchases by Quarter (2000-2024) \u2014 Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n

Of course, this data is on a national level, and there is large regional variation. Unsurprisingly, markets that saw the biggest spikes during the pandemic have reverted the fastest. Phoenix, a pandemic darling, has seen the share of investor purchases drop from 32% down to 17% in just the last year. Other major markets like Las Vegas and Atlanta have fallen fast too. <\/p>\n\n\n\n

On the other hand, a few markets are actually seeing modest upticks in investor market share. New York City leads the way, going from 16% to 18%, with Cleveland, Chicago, and a few markets in California also up. <\/p>\n\n\n\n

The Redfin report has a lot of regional data if you want to dig in and find your area. <\/p>\n\n\n\n\n\n\n

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