Investor Ownership of Homes Grows in California

News Summary

New data reveals that 19% of homes in California are owned by investors, with mountain regions like Sierra County having rates as high as 83%. This trend exacerbates the state’s housing crisis, which has seen home prices surge by 50% over the past six years. Areas with more than 50% investor ownership include Sierra, Trinity, and Mono counties. While investor ownership brings liquidity, it also raises concerns about affordability for homebuyers. California ranks 36th in the U.S. for investor-owned homes but has the second-highest number nationwide.

California is experiencing a significant trend in home ownership, with new data revealing that 19% of the state’s homes are currently owned by investors. This figure, analyzed by BatchData and reported by the Orange County Register, highlights a growing concern within an already strained housing market.

In particular, California’s mountainous regions show an even higher concentration of investor ownership, with some areas, like Sierra County, reporting up to 83% of homes owned by investors. In contrast, Ventura County on the coast reports the lowest rate in the state, at 14%.

Furthermore, there are seven counties within California where more than 50% of homes are investor-owned. These include Sierra, Trinity, Mono, Alpine, Plumas, Modoc, and Calaveras. Meanwhile, major urban areas such as Los Angeles, San Francisco, San Diego, and Orange County show relatively lower rates of investor ownership, which range from 15% to 16%.

Notably, despite the substantial percentage of homes owned by investors, California ranks 36th among all states for investor-owned homes, which is slightly below the national average of 20%. Currently, California has the second-highest number of investor-owned homes in the U.S., totaling approximately 1.45 million, just behind Texas, which has 1.66 million. Florida follows with about 1.21 million investor-owned homes.

The state is facing an acute housing crisis as home prices have surged by 50% over the past six years, making California homes among the most costly in the nation. Nationally, the U.S. Chamber of Commerce estimates a shortage of about 4.5 million homes. In the first quarter of 2025, investor-owned homes represented 26.8% of all national residential property sales, marking the highest level in five years.

One of the factors contributing to the upsurge in investor purchases is the rising cost of homeownership, which poses significant challenges for traditional homebuyers. The rental market has also seen rising costs, which deter first-time buyers. Additionally, the doubling of mortgage rates in 2022 has led to a decline in homebuyer activity, allowing investors to take a larger share of the market.

The report indicates that while investors provide essential liquidity in tight housing markets, their presence may also exacerbate the rising prices of homes rather than promote affordability. Research shows that while billions are injected into real estate by investors, this influx does not necessarily correlate with improved affordability, and can contribute to escalating property prices.

In comparison to more tourist-heavy states like Hawaii and Alaska, which report 40% and 35% of homes being investor-owned respectively, California’s percentages are lower. However, in relatively affordable states such as Arkansas and West Virginia, the figures still run high at 30%.

In California, most (approximately 85%) of the investor-owned homes are held by individuals owning between one and five properties, with a further 5% owned by those holding between six and ten properties. This indicates that 90% of the homes are in the portfolio of small investors.

Despite having a lower percentage of investor ownership compared to many other states, California’s growth in investor portfolios continues, with an increase of 143,747 homes since 2020. However, the potential returns on investment properties are viewed as relatively low, with price appreciation ranked at No. 41 nationwide.

The growing trend of investor ownership of homes in California poses critical implications for the housing market, bringing necessary liquidity but potentially hampering affordability for would-be homeowners in a state already characterized by its challenging housing landscape.

Deeper Dive: News & Info About This Topic

• The Guardian
• Orange County Register
• SFGATE
• Patch
• MSN Money
• Wikipedia: Real estate in California
• Google Search: California housing market
• Google Scholar: California housing investors
• Encyclopedia Britannica: Real estate
• Google News: California real estate investors