Lake Geneva Real Estate Investors

Are All the Homes Really Being Bought Up by Investors?

~ bwebster

Are you trying to buy a home but you feel like you’re up against deep-pocketed Wall Street investors snatching up everything in sight? Many people believe mega investors are driving up prices and buying up all the homes for sale, and that’s making it hard for regular buyers like you to compete.

But here’s the truth. Investor purchases are actually on the decline, and the big players aren’t nearly as active as you might think. Let’s dive into the facts and put this myth to rest.

Most Investors Are Small, Not Mega Investors

A common misconception is that massive institutional investors are dominating the market. In reality, that’s not the case. The Mortgage Reports explains:

“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”

Most real estate investors are mom-and-pop investors who own just a few properties — not large corporations buying up entire neighborhoods. They’reinvest people like your neighbors who have another home they’re renting out or a vacation getaway.

Investor Home Purchases Are Dropping

But what about the big investors you hear about in the news? Lately, those institutional investors – the ones that make headlines – have pulled back and aren’t buying as many homes.

According to John Burns Research and Consulting (JBREC), at their all-time peak in Q2 2022, institutional investors (those owning 1,000+ single-family homes) only made up 2.4% of home sales. And that number has only come down since then. By Q3 2024, that number had fallen to just 0.3% (see graph below):

That’s a major shift, and it means far fewer investors are competing in the market now than just a few years ago.

Investors are clearly more reluctant to buy in today’s market, but why? The answer is largely because higher mortgage rates and home prices have made it less attractive for them.

The idea that Wall Street investors are buying up all the homes and making it impossible for you to compete is a myth. While some investors are still in the market, they’re not nearly as active as they were in past years.

Bottom Line

Big institutional investors aren’t buying up all the homes – if anything they’re buying less than they have been. Let’s connect and talk about what’s happening in our local market. There could be more opportunities than you think.

How does knowing investors are buying fewer homes change the way you see your chances in today’s market?

Are Wall Street Investors Really Buying All the Homes?

~ bwebster

Let’s be real – buying a home right now is tough. You’re scrolling through listings, rushing to open houses, and maybe even losing out to more competitive offers. Somewhere along the way, you might’ve heard the reason it’s so hard to find a home is because big Wall Street investors are swooping in and snatching up everything in sight.

But here’s the thing: that’s mostly a myth. While investors are part of the market, according to Redfin, they’re a relatively small part:

Here’s what that means. Five out of every six homes are being purchased by everyday homebuyers like you – not big investors.

So, before you get discouraged, let’s take a look at what’s really going on. You might be surprised to learn that Wall Street isn’t the competition you may think it is.

Most Investors Are Small Mom-and-Pops

Most investors aren’t the mega corporations you’ve probably heard about. In fact, many are your neighbors. A recent report from CoreLogic shows most investors are small, mom-and-pop types who own fewer than 10 properties. They aren’t massive companies with endless resources. Picture your neighbor who has another home they’re renting out or a vacation getaway.

Only about 1% of the market is owned by large, mega investors with thousands of properties. The majority are still owned by individuals and smaller investors – not the Wall Street giants.

Investor Purchases Are Declining

Not only are most investors small, but overall investor purchases have been on the decline. As the same report from CoreLogic says:

“Investors made 80,000 purchases in June 2024, compared with 112,000 in June 2023, and a nearly 50% percent drop from the high of 149,000 purchases in June 2021 . . .”

And what does this mean going forward? CoreLogic goes on to point out this downward trend is expected to continue into 2025.

So, if it seems like competition with investors is pushing you out of the market, it might help to know that investor activity is actually slowing down.

Bottom Line

The idea that Wall Street is buying up all the homes is largely a myth. Most investors are small ones, and the share of homes purchased by investors is declining – so you can take this one off your worry list.

If you have questions about the housing market, let’s talk.