Investors aren’t crazy about California homes – The Mercury News

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Bulle watch”Digs into trends that may indicate future economic and / or housing market problems.

Buzz: Investor activity in buying homes in California may be high, but it remains low compared to hot US markets like Arizona, Georgia or Utah.

Source: My trusty spreadsheet reviewed Attom’s data on three key slices of investor purchases in Q3 2021: flip or rent) and fins (buyers who sell within the year).

The trend

The inconstancy of investors makes this group a group to watch closely. When looking at state-wide versus nation-wide movements, investors represent a rapidly growing but below-average slice of home buying activity …

Cash buyers: In California, they landed 28.5% of sales, 21st among states. Purchases increased 63% in one year. Nationally, these buyers captured 34% of sales, up 59%. Most of the state? Georgia at 65%.

Institutional buyers: California’s 6.3% share ranked 18th. Their purchases have increased by 325% in one year. Nationally, their 7.3% sales share increased 208%. Superior state? Arizona at 17.4%.

Fins: California’s 5.2% share ranked 20th. Their purchases have increased by 19% in one year. Nationally, they represented 5.7% of sales, up 10%. Superior state? Utah at 9.2%.

Dissection

Let’s take a look at the major California markets, ranked by their total number of homes, comparing the market share of cash buyers and how they rank among 165 metropolitan areas in the United States. All-cash transactions have historically peaked at market highs (as prices get too high) and troughs (when few bankers lend) …

Los Angeles-Orange County: Cash buyers accounted for 28.7% of sales, No. 110 among subways. Their purchases have increased by 64% in one year.

San Francisco: 23.9% share, no.138. Up 75%.

Interior Empire: 30.3%, No. 95. Up 65%.

San Diego: 26.7%, No. 121. Up 72%.

Sacramento: 28.9%, No. 105. Up 74%.

San José: 21.3%, No. 152. Up 51%.

Fresno: 32.1%, No. 81. Up 89%.

Bakersfield: 30.8%, n ° 90. Up 72%.

Ventura County: 24.5%, n ° 132. Up 54%.

Top spots for cash buyers? Columbus, Georgia, 75%; Atlanta, at 69%; Macon, Georgia, 59%; and Youngstown, Ohio, at 57%.

Then, the large institutional buyers (175 classified metros) are relatively new players, so there is no track record to handicap. The big jumps in activity come from very low levels in 2020 …

LA-OC: 6.2% of all purchases – No. 70 metro. Purchases increased 233% in one year.

San Francisco: 3.8% – No. 138 – up 292%.

Interior Empire: 8.1% – no.39 – up 456%.

San Diego: 7.9% – n ° 41 – up 338%.

Sacramento: 9.5% – No. 29 – up 483%.

San José: 4.8% – No. 117 – up 501%.

Fresno: 6.6% – no.56 – up 205%.

Bakersfield: 6.4% – No. 62 – up 277%.

Ventura County: 5.5% – No. 91 – up 495%.

Highs for institutional stocks? Atlanta at 19.54%; Phoenix at 19.5%; Charlotte at 19.3% and Jacksonville at 19.1%.

Finally, the palms (194 classified metros). They will buy and return as long as it pays off …

LA-OC: 6.2% of sales – n ° 77 for metros – with purchases up 30% in one year.

San Francisco: 4% share, No. 166 – up 39%.

Interior Empire: 6%, No. 86 – up 13%.

San Diego: 6.1%, No. 80 – up 42%.

Sacramento: 3.9%, No 168 – down 14%.

San José: 3.8%, No. 172 – up 37%.

Fresno: 6.3%, No. 74 – up 4%.

Bakersfield: 3.9%, No 168 – down 44%.

Ventura County: 4.1%, No 162 – up 49%.

Top for the pinball part? Phoenix and Ogden, Utah, 9.5%; Salt Lake City and Salisbury, Maryland, 9.3%.

Another view

I know Californians pin for Phoenix, but his real estate is a bit crazy …

Cash buyers: 43% of sales, No. 26 metro. Change? Up 96% in one year.

Institutional buyers: 19.5%, share n ° 2. Up 345%.

Fins: 9.5%, action n ° 1. Up to 15%.

How sparkling?

On a scale of zero bubble (no bubble here) to five bubbles (five alarm alert) … THREE BUBBLES!

I’m sure some will see these investor trends as a sign of California’s weak economy, but I’ll start the new year with a risk thought: luckily we’re not Phoenix!

Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]

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