How Many Homes Are Investors Actually Buying in Los Angeles and Beverly Hills, CA?
How Many Homes Are Investors Actually Buying in Los Angeles and Beverly Hills, CA? | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
Are big investors really buying up all the homes today? If you’re trying to find a house to buy in Los Angeles or Beverly Hills, this may be something you’re wondering about. Maybe you’ve read about it or seen reels on social media saying investors buying all the homes is making it even harder to find what the average buyer is looking for. But spoiler alert – there’s a lot of misinformation out there. To clear things up, here's the scoop on what's really happening. A lot of the big investor activity is actually in the rearview mirror already.
What the Numbers Say
The Wall Street Journal (WSJ) explains:
“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”
The key here is investor activity has slowed significantly, and even during the peak of investor buying, 3 out of every 4 single-family homes purchased were by regular, everyday buyers – not investors. And of the investors who bought over the past few years, most weren’t the big investors you may be hearing about. The vast majority were small mom-and-pop investors – people like your neighbors who own only a couple of homes, maybe even just their main residence and a vacation home.
The Reality in Los Angeles and Beverly Hills
In luxury markets like Los Angeles and Beverly Hills, the scenario is quite similar. While high-end properties often attract investment interest, the majority of homebuyers are individuals and families looking to settle in these prestigious neighborhoods. During the peak in 2022, institutional investors – those who own 1,000+ properties – bought about 2% of available single-family homes. That percentage has gotten even smaller recently.
Challenges for Mega Investors
In an effort to understand why that percentage is trending down, private lender RCN Capital asked investors about the challenges they’re facing. Here’s what Jeffrey Tesch, CEO of RCN Capital, found out:
“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”
Understanding these challenges is important because they show big, mega investors aren’t taking over the housing market in Los Angeles or Beverly Hills.
The Bottom Line
So, don't fall for everything you hear. Big investors aren’t snatching up all the homes and making it impossible for regular people to buy. The luxury real estate market in Los Angeles and Beverly Hills remains accessible for individual buyers looking for their dream homes. If you've got questions about what you're hearing about the housing market, let's chat. I can help you understand what's really going on and guide you through the process of buying or selling in these desirable neighborhoods.
Call Christophe Choo at (310) 777-6342 to tour your future home "HERE" or click "HERE" to estimate your home value
