Relatively speaking, California is not a hot spot for housing investors.
That’s a conclusion from my trusty spreadsheet’s review of data on investor activity across the nation from BatchData, a small data tracker that digs deeper into property records than many traditional real estate analysts.
BatchData reviewed California ownership records to identify the state’s owner-occupied residences compared to houses controlled by investors. This study included properties for short-term or long-term rentals, second homes, and vacation retreats but did not follow condos or build-to-rent single-family-home projects.
By this math, 19% of California houses were owned by investors, ranking No. 36 among the states and just below the 20% national norm.
That’s a meek share compared with where U.S. investors are most intensely busy – in states with small populations and tourism hooks. Those states include Hawaii at 40%, Alaska at 35%, Vermont at 31%, West Virginia at 30%, and Wyoming at 30%.
Conversely, investors were most shy in the Northeast: Connecticut at 10%, Rhode Island and Massachusetts at 12%, and Delaware at 13%.
And California’s economic rivals were not much more popular to investors than the Golden State. Texas was No. 24 at 22% and Florida, No. 27 at 21%.
Of course, due to its sheer size, California ranked No. 2 for the number of investment homes with 1.45 million, or 8% of all US investor-owned homes. Tops was Texas at 1.66 million. No. 3 was Florida at 1.21 million, then North Carolina at 787,055, and Michigan at 704,122.
However, investors still grow their California portfolios. They added 143,747 houses since 2020, an 11% jump – by buying 358,092 houses while selling 214,345.
Not so golden
Why the low investor share for California?
Yes, it’s a big spot for renters. Census Bureau stats show 45% of households live in a place they don’t own, the third-highest share of tenants nationally.
However, there’s also the sky-high price tag for single-family homes, the third-highest nationally at $866,100, according to Redfin. That stretches the budget for investors, too.
Plus, typical returns have been skimpy. California’s six-year price appreciation ranked No. 41 at 50%, according to one federal index.
And underlying economics seem tepid. California’s flat population over five years ranked No. 47 and its five-year job growth at 3.8% was a middling No. 25.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com