Bubble Watch: Investors are 51% of Southern California’s Homebuying Surge

Median price paid by local investors? $898,000

Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: Half of Southern California’s homebuying surge this summer can be tied to a big jump in the purchasing pace by investors.

Source: My trusty spreadsheet reviewed Redfin estimates of investor activity locally and in 40 major metropolitan areas in the third quarter, defined as purchases made by entities with corporate-sounding names or descriptions. 

The Trend

Surging home prices with gains of 30% in two years have clearly been a draw for investors to the four counties covered by the Southern California News Group.

nvestors bought 8,900 residences in the summer or 17.7% of all purchases. These weren’t fixer-uppers, by the way, as the typical sales price for these deals was $898,000.

Compare that with one year earlier, when homebuying was swiftly rebounding from a locked-down spring. Investors bought 6,758 homes in the summer of 2020, or 14.6% of the market. That’s a 32% jump in investor purchases.

Or look at ballooning bets this way: Local investors bought 2,142 more homes this summer vs. 2020’s third quarter — or 51% of the region’s 4,228 overall sales increase.

The Dissection

Let’s start by saying that if this Southern California speculator surge looks bold, it’s tame when viewed using a national yardstick.

Click here to read the full article at the Orange County Register

Comments

  1. When you demand zoning and housing plans are irrelevant as Calif. SB-9 and more have done then you have created a market that will price the majority out of the market.

    Wait?

    That is what the Radical Democrats state they do not want.

    Dichotomy? You bectha…..

    Stupid sure, but then Democrats have not been known in the past 50 years of being smart.

  2. UPDATE….

    FRISCO IS BEING SUED BY THE STATE FOR NOT PROVIDING ADDITIONAL “STACK’M & PACK’M” HOUSING.

    HOW GOOD DOES THIS GET, NEWSOM WAS SPAWNED BY THEM AND WINIE IS NOW FORCED TO KILL HIS OWN……

  3. Boris Badenov says

    Me thinks the bubble is popped, a house on my steet that would have sold in two days has been on the market for 3 weeks. It’s priced reasonably.

  4. citizenkarma says

    So then are these houses now rentals? Flooding established neighborhoods of owner-occupied? Trouble ahead. One more thing to look out for before purchasing a house to live in.

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