When 4 out of every 10 California home purchases are tied to investors, something is wrong.
Debate is swirling in Congress over how to increase the odds of success for someone who wants to own a home.
It’s a complex issue with numerous nuances, and sadly, the political spotlight has focused on giant investors who own a small slice of the nation’s single-family homes.
What appears to be overlooked in all the policy debates is how much recent market activity is connected to investors of all sizes.
My trusty spreadsheet reviewed a Cotality report examining how many of 2025’s single-family home and town home purchases were made by nonoccupant owners in 21 metropolitan areas with significant investor activity — including five in California.
Consider that in those five California housing markets, 59,400 of last year’s 150,300 purchases were tied to investors. That’s 40%. Nationally, it was 30%.
It’s comical that some landlord cheerleaders insist that all this investor activity did not come at the expense of households that wanted to own their living spaces.
Yes, investors are still buying while traditional house hunters are far more reluctant. That’s boosted the investor share of the market.
Remember, California’s 2025 overall single-family home sales were 29% below average, according to Attom stats.
You could argue that without investors, California home prices would be dropping sharply. Those potential discounts would increase affordability, allowing more house hunters to buy.
What nobody wants to say is that cutting demand – say, limiting investors – could lower the barrier to ownership by cutting prices.
Wrong slice
Unfortunately, the anti-investor buzz is a tad misguided.
The rhetoric focuses on “Wall Street giants” gobbling up houses. What Cotality called “mega” investors – those owning 1,000 units or more nationwide – accounted for only 6% of California’s 2025 home sales.
So, legislative attempts to ban financial behemoths from the marketplace won’t do much for house hunters. But let’s not ignore others who collect houses as cash-flow assets.
California’s small investors (owning fewer than 10 houses) accounted for 16% of all 2025 sales, Meanwhile, 12% of deals were closed by medium-sized investors (10 to 99 houses) and 7% were by large investors (100 to 999 houses).
Investors are not bad people. They’re just taking advantage of a financial system, primarily the tax code, that oddly prioritizes investors over wannabe owners.
House investing creates a circular debate. Investors do provide a service: housing folks who can’t or don’t want to own. But if more folks owned, there’d be less demand for rental houses, no?
Just 55% of Californians owned their homes last year, the third-lowest level among states and the same rate as in 1992.
So, perhaps new thinking is in order.
Locally speaking
Ponder last year’s investor activity in these California metropolitan areas, ranked by purchase share:
San Jose: 48% of sales tied to investors – the highest share of 21 metros tracked – 4,500 of 9,400 purchases. By size, 7% mega-investors, 17% small, 15% median and 9% large.
Los Angeles-Orange County: 43% by investors – No. 2 of 21 – 23,600 of 54,500 purchases. By size, 6% mega-investors, 17% small, 13% median and 7% large.
San Diego: 37% by investors – No. 7 – 6,500 of 17,500 purchases. By size, 5% mega-investors, 14% small, 12% median and 6% large.
San Francisco: 37% by investors – No. 8 – 10,000 of 27,000 purchases. By size, 5% mega-investors, 16% small, 10% median and 6% large.
Inland Empire: 36% by investors – No. 10 – 14,900 of 41,800 purchases. By size, 5% mega-investors, 13% small, 11% median and 6% large.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com.
