Investor Purchases See Biggest Drop Ever
The great investor threat to the housing market is now officially over, according to the latest data from Redfin.
- Y-O-Y: Investor purchases of U.S. homes fell a record 45.8% year over year in the fourth quarter of 2022, this is down from the 30.2% drop in the third quarter and is the biggest drop in history.
- Q-O-Q: Investor purchases slumped 27% on a quarter-over-quarter basis, the largest quarterly decline on record aside from the beginning of the pandemic.
New Record: The previous record occurred in 2008 when investor purchases slumped 45.1% during the subprime mortgage crisis.
Boom No More. Not surprisingly, the biggest boom towns are not seeing the biggest busts. Las Vegas saw the biggest decline in investor home purchases with a 67% drop year-over-year in the fourth quarter.
- Phoenix took the number two spot with a 66.7% decline followed by Nassau County, NY (-63%), Atlanta (-62.8%), and Charlotte, NC (-61.9%).
Single-Family Slump. Investor purchases of single-family homes fell a record 49.8% year-over-year in the fourth quarter, more than any other property type. Investor purchases of condos/co-ops decreased by 35.6% while townhouses and multi-family properties both fell 31.1%.
Zillow Signals More Pain Ahead in Online Real Estate
It’s not just iBuying that Zillow is bad at. “Wall Street is forecasting Zillow, for example, will lose tens of millions of dollars in mortgages this year on the basis of adjusted Ebitda. Even two years ago, when a Mortgage Bankers’ Association report showed 96% of mortgage lenders making money amid record low mortgage rates, Zillow still logged losses.”