CoreLogic: Investor activity slowed in 4Q 2021 and more investors appear to be holding on to properties longer. Analysts say summer is the time to watch.
IRVINE, Calif. – Investor activity slowed in the fourth quarter of 2021, according to newly released data from CoreLogic, a real estate research firm. After reaching peaks in the second and third quarters of 2021, the share of homes purchased by investors is falling, according to the report.
CoreLogic recorded a decrease in investor activity in home purchases in November 2021 for the first time since July 2020, with that decline continuing into December. But researchers say the true test of whether the investor purchasing spree is over will come in the summer months, typically the busiest time in real estate.
Large investors – those who own 100 or more properties – have decreased their activity the most. In December 2021, 20% of the investor purchases were made by large investors, a decrease of six percentage points from September 2021, according to CoreLogic’s data.
On the other hand, small investors (who own three to 10 properties) and medium-size investors (who own from 10 to 99 properties) increased their activity in the fourth quarter of 2021 compared to historical levels.
Researchers say that small investors now account for 50% of investor purchases.
Many investors are holding on to the properties rather than trying to sell them quickly for a profit. Only 13.8% of the homes purchased by investors in June 2021 were resold by December, a drop of 1.3 percentage points compared to June 2019.
Still, CoreLogic researchers note the overall decrease in investor activity may be a short blip than an overall trend. “As we move into the summer and owner-occupied buyers become more active, we will see clearer signs to indicate whether we are in a new normal or if 2021 saw an unusual surge in real estate investment,” Thomas Malone, an economist at CoreLogic, writes in the research paper.
Source: “Single-Family Investor Activity Stalls in the Fourth Quarter of 2021,” CoreLogic (April 4, 2022)