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After taking a step back in 2023, U.S. real estate investors are once again gobbling up homes this year. Investors bought nearly one-fifth of the homes sold in the 2024 first quarter, Fortune reported. Although that’s down from the COVID-19 pandemic peak, it was the highest share in almost two years.
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According to a new analysis from Redfin, single-family homes represented more than two-thirds (68.9%) of investor purchases in the first quarter — the highest percentage since mid-2022. Condos and co-ops represented 18.7% of the total, followed by townhouses (7.2%) and multifamily properties (5.3%).
Investor purchases of high-priced homes climbed 10.5% year over year in the first quarter, Redfin noted. That was the first increase in almost two years. Investor purchases of mid-priced homes rose 4.7% — also the first increase in nearly two years — while investor purchases of low-priced homes declined 6.5% year over year.
In terms of capital gains, investors in Philadelphia had the highest payoff in the first quarter of 2024. On average, investors in Philly sold homes for 136.2% more than they paid. Cincinnati, Ohio, homes sold for 120% more, followed by Virginia Beach, Virginia, where homes sold for 97% more. Homes in Newark, New Jersey, and Columbus, Ohio, sold for 96.6% more and 94.3% more, respectively.
But most of the investor action is happening farther west. California dominated the list of cities where investors bought the most homes vs. a year ago. Because investors are in the business of turning a profit on their home purchases, they obviously see profits in the Golden State.
But that doesn’t necessarily mean you should buy up homes there. California remains one of the most expensive housing markets in the country, so you would either need a lot of capital or a lot of mortgage financing to get in on the action.
Anaheim, California
Year-over-year change, investor purchases (Q1): 8.2%
Share of purchased homes bought by investors: 22.7%
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Denver, Colorado
Year-over-year change, investor purchases (Q1): 12.0%
Share of purchased homes bought by investors: 15.3%
Las Vegas, Nevada
Year-over-year change, investor purchases (Q1): 14.9%
Share of purchased homes bought by investors: 22.7%
Minneapolis, Minnesota
Year-over-year change, investor purchases (Q1): 21.6%
Share of purchased homes bought by investors: 12.7%
Oakland, California
Year-over-year change, investor purchases (Q1): 22%
Share of purchased homes bought by investors: 16.9%
Phoenix, Arizona
Year-over-year change, investor purchases (Q1): 9.3%
Share of purchased homes bought by investors: 21.3%
Riverside, California
Year-over-year change, investor purchases (Q1): 12.6%
Share of purchased homes bought by investors: 20.4%
Sacramento, California
Year-over-year change, investor purchases (Q1): 20.1%
Share of purchased homes bought by investors: 19.4%
San Diego, California
Year-over-year change, investor purchases (Q1): 12.5%
Share of purchased homes bought by investors: 23.6%
San Francisco, California
Year-over-year change, investor purchases (Q1): 18.5%
Share of purchased homes bought by investors: 23.4%
San Jose, California
Year-over-year change, investor purchases (Q1): 27.8%
Share of purchased homes bought by investors: 17.1%
Tampa, Florida
Year-over-year change, investor purchases (Q1): 6.7%
Share of purchased homes bought by investors: 20.4%
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This article originally appeared on GOBankingRates.com: Real Estate Investors Are Buying Up Homes in These 12 Cities — Should You?
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