News Summary
California’s housing market is increasingly dominated by investors, with 19% of homes owned by them. Mountain regions like Sierra County show striking levels of 83% investor ownership, while urban areas remain lower. The trend is exacerbated by ongoing housing shortages and rising home prices. Despite just a 19% share, California has the second-highest total of investor-owned homes in the U.S., highlighting a significant shift in ownership patterns that could impact home affordability.
California is currently witnessing a significant trend in its housing market, with 19% of homes owned by investors, according to recent data from BatchData, analyzed by the Orange County Register. This level of investor ownership is indicative of a growing trend in which institutional and individual investors are buying up residential properties, particularly in certain regions of the state.
Mountain regions of California, such as Sierra County, have seen remarkably high rates of investor ownership, with figures soaring to 83%. This statistic starkly contrasts with Ventura County, located along the coast, which has the lowest investor ownership rate in the state at 14%. Furthermore, seven counties in California report more than 50% of their homes owned by investors. These counties are Sierra, Trinity, Mono, Alpine, Plumas, Modoc, and Calaveras.
In major urban areas such as Los Angeles, San Francisco, San Diego, and Orange Counties, investor ownership rates are notably lower, ranging between 15% and 16%. Even with these lower rates, California ranks 36th among all states for investor-owned homes, falling slightly below the national average of 20%.
The increasing prevalence of investor-owned homes occurs against the backdrop of California’s ongoing housing crisis, characterized by a serious housing shortage. Over the past six years, home prices have surged by 50%, making California’s housing market one of the most expensive in the United States. The US Chamber of Commerce has indicated a nationwide shortage of approximately 4.5 million homes, further complicating the housing landscape.
In the first quarter of 2025, investor-owned homes made up 26.8% of all residential property sales in the United States, marking the highest percentage observed in the last five years. The rising costs associated with homeownership are creating barriers for traditional buyers, leading to an increase in investor purchases. Coupled with mortgage rates that have doubled in 2022, there is a noted decrease in buyer activity, enabling investors to capitalize on this trend.
While some experts argue that investors introduce necessary liquidity into tight housing markets, they may simultaneously contribute to escalating prices rather than enhancing affordability. Although investors provide crucial funds to unsteady markets, the net effect can be an increase in prices, which may not benefit average potential homeowners.
In the broader context, states with heavy tourist traffic, such as Hawaii and Alaska, exhibit much higher shares of investor-owned homes at 40% and 35%, respectively. Other states with notable levels of investor ownership include Arkansas and West Virginia, each reporting 30% of homes being investor-owned. By overall numbers, California holds the second-highest total of investor-owned homes in the country, with around 1.45 million, trailing Texas, which leads at 1.66 million. Florida takes the third spot with approximately 1.21 million investor-owned homes.
Interestingly, a large majority of these investor-owned properties in California—approximately 85%—are owned by individuals or entities with one to five properties, suggesting that small investors dominate the market. Additionally, about 5% of these investors manage between six to ten properties, indicating that approximately 90% of investor-owned homes are in the hands of small-scale investors. Since 2020, California has seen a growth of 143,747 investor-owned homes, reflecting a trend that continues despite the state having lower percentages in comparison to other regions.
Despite California’s somewhat lower share of investor ownership compared to other states, the trend of expanding investor portfolios suggests that its housing market remains an attractive option for buyers, even amidst rising costs and perceived low returns on investment properties, where price appreciation ranks 41st nationwide.
Deeper Dive: News & Info About This Topic
- Orange County Register
- The Guardian
- SFGATE
- Google Search: California housing market 2025
- Wikipedia: Real estate in California
