Redfin: Investor Home Purchases Drop Slightly in Q4

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Redfin, Seattle, reported investor activity declined in Q4, with 47,004 homes purchased.

That’s the lowest Q4 for investor purchases since 2016, and down 3.9% from a year earlier.

Investors purchased 17.1% of homes sold in Q4, the lowest level for the quarter since 2020 and down from 19% a year earlier. In December, 10% of home listings were from investors, flat from a year earlier.

Redfin pointed to a slowing housing market, tepid demand, economic uncertainty and elevated interest rates as contributing to the diminished activity.

Looking at the amount investors are spending, they purchased $36.5 billion of homes in Q4, up 6.3% year-over-year. That increase is in line with the growth in home sale prices during the period.

Redfin noted that investor purchases aren’t declining as quickly as they did in late 2022 and early 2023, when rising mortgage rates stalled homebuying demand and made it more expensive to flip homes.

Investor purchases fell the most in Orlando, Fla., down by 27.5% year-over-year, followed by Chicago (down 23.3%), Miami (down 21.3%), Atlanta (down 18.4%) and West Palm Beach, Fla., (down 14.5%).

Investor share also fell in large parts of the Sunshine State. For example, investors purchased 20.7% of homes that sold in Orlando in Q4, down from 26.6% a year earlier.

In contrast, investors bought more homes in parts of the Bay Area and West Coast. Investors in Seattle bought 33.8% more homes than a year earlier, followed by San Jose, Calif., (up 21.1%), Oakland, Calif., (up 19.4%), San Francisco (up 19.1%) and Detroit (up 15.5%).

Investors bought only 8,220 condos in Q4, the lowest level for that quarter since 2012 and down 13% from a year earlier.

Investor purchases of single-family homes fell 1.6% year-over-year and purchases of townhomes fell 6.1%. Investors bought 2.9% more multifamily properties than a year earlier.

Of all homes purchased by investors, 47.3% were low-priced homes, 29.6% were high-priced homes and 23.2% were mid-priced homes.