Investor activity in the real estate market has been surging. But investor market share is down compared with homeowner purchases, which continue to lead the way in driving the hot housing market, a new report from CoreLogic, a real estate research firm, shows.
Still, “investors have hardly missed out on the housing boom in the back half of 2020,” Thomas Malone, CoreLogic’s economist, said in the report. “Instead, they have just not been as active as individual buyers, who appear to have muscled investors out of the market by a small margin.”
The Mountain-West region of the U.S. saw the highest amount of investor activity over the past year, the analysis from CoreLogic shows. Meanwhile, the West had the weakest activity.
“There are many possible reasons for the variations among states,” Malone said. “Investors have an attraction to markets that hit the sweet spot of high growth in both prices and sales that unambiguously indicates significant demand increases. Their strong presence in the Mountain-West, probably the hottest region for housing in the country, shows this. The lower Midwest also offers strong growth at bargain prices. Conversely, the Northeast and the West Coast make investors very nervous due to their markedly higher prices than the rest of the country.”
The figure below shows year-over-year growth in investor sales for 2020.