Though institutional investors basically sidelined themselves from March through May 2020, they jumped in to markets with growing populations and low prices during the second half of the year.
Investor Activity in the 2020 Housing Market
CoreLogic’s newly released report on investor activity in the housing market during 2020 indicates that investor activity re-awakened from a decline of 36% y/y in May of last year to buying in to markets with a combination of population growth and low pricing.
All in all, institutional investing in the second half of 2020 recovered with an increase of +12% y/y to its previous level of a 16% market share until December 2020.
Essentially, institutional investment in residential real estate was on the same path as that of individual homebuyers.
READ: 2022 Top Agent Success Secrets [Revealed]: New FREE Real Estate Coaching Web Event, Revealing 17 Surprising Secrets Of The Top 100 $ Millionaire Agents. Get Your FREE Spot For The 2022 Real Estate Coaching Webinar Now. After You Have Attended This Event You Will Have A Huge Feeling Of Relief Knowing You Will FINALLY Laugh At Your Money Worries – You Will Have Your Own Personalized 2022 Step-By-Step Business Plan. Learn Now How To Generate 100’s of Motivated Leads for FREE, Without Coming Off As A Pushy Salesperson and Losing Your Soul. You Will Soon Know How To Become One of the 1000s of Agents Making HUGE Money Who Never Thought They Could. YES, I Want To Attend The FREE Webinar! <——Click To Register
P.S. Free Webinar, Limited Space. Less Than 300 Spots Still Available.
Investor Activity Varied by States/Regions
Investors showed a strong interest in the Mountain-West region of the country in 2020. New England states and the more Southern states in the Midwest also captured investor attention.
Why those areas of the country? Strong demand as indicated by rising sales at bargain prices.
Conversely, the Northeast and West Coast garnered less investor attention due to high prices and pandemic-inspired migration trends out of urban areas.
Comparison of Metros with Most Investor Activity in 2011 to Metros with Most Investor Activity in 2020
During 2011, California dominated investor activity. Seven of the state’s metros (Los Angeles, San Jose, San Diego, San Francisco, Sacramento, Oxnard, Stockton, and Riverside) were considered to be “worthy” of investors’ dollars.
CoreLogic wrote at the time that these California metros, along with Las Vegas NV and Corpus Christi and McAllen in TX “…reflected the nature of the market in the wake of the Great Recession…” due to opportunities associated with high foreclosure rates.
In 2020, only Corpus Christi stirred investor interest and dollars among places that bagged investors’ dollars in 2011. Investors instead directed their attentions and resources to the following:
- Boise ID
- Kansas City MO
- Atlanta
- Memphis
- Salt Lake City
- Wichita KS
- Provo UT
- Phoenix
- Springfield MO
- Corpus Christi
Investor Activity Slowed in 2020 But…
According to CoreLogic, 15.5% of residential home sales were due to investor activity during 2020. Comparatively, that market share is down from 16.3% in 2019 and 16.8% in 2018.
However, as we’ve written here recently, investor activity has been picking up in 2021. As Molly Boesel, principal economist with CoreLogic, was quoted in this report’s press release, “…when the hot housing market cools down, we may see investor activity increase as they try to buy more properties at lower prices.”
Thanks to CoreLogic and Inman.
