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19% of California houses are owned by investors

ocregister.com

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Re: 19% of California houses are owned by investors

#111

Post by grafmax »

tptacek wrote: post #91
grafmax wrote: post #69

Earlier quoted context omitted.

An unregulated supply will still offer promising investment opportunities to those with enough money to buy them up. Look at crypto or private equity. These markets are lightly regulated. But prices are bid up by big money. Unfortunately just dumping regulation is unlikely to fix housing.

People say this but then never draw the rest of the owl. It costs money, substantial money, to hold on to a house. As soon as you propose that you're going to close that gap by renting the house out, you're competing in the market with everybody else letting out houses, and supply-and-demand kicks in. Can you explain the mechanism by which accumulating vacant houses would provide the same reward structure as crypto s…

Professional property managers can scale the cost of ownership in a way individual owners can’t.

Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation.

As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation.

Ultimately, this isn't just a supply-and-demand problem in an idealized market. It's a resource allocation issue where investors with significant capital can hoard housing, driving up costs, while many people struggle with homelessness. Simply greasing the market with deregulation won't solve this fundamental imbalance.

Re: 19% of California houses are owned by investors

#113

Post by tptacek »

grafmax wrote: post #111
tptacek wrote: post #91

Earlier quoted context omitted.

People say this but then never draw the rest of the owl. It costs money, substantial money, to hold on to a house. As soon as you propose that you're going to close that gap by renting the house out, you're competing in the market with everybody else letting out houses, and supply-and-demand kicks in. Can you explain the mechanism by which accumulating vacant houses would provide the same reward structure as crypto s…

Professional property managers can scale the cost of ownership in a way individual owners can’t. Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation. As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation. Ultimately, this isn't just a supply-…

I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.

Re: 19% of California houses are owned by investors

#114

Post by lossolo »

tptacek wrote: post #100

Seems like extremely important context that 91% of these investor-owned houses are owned by entities with 5 or fewer houses: in other words, these are mostly houses that normal mom-and-pop homeowners bought.

This seems to be the source https://www.ocregister.com/2025/07/16/where-in-california-do...

"Most of California’s single-family house investors are “mom and pop” types, according to BatchData.

Small-fry owners, with up to five properties nationwide, control 91% of California investment houses.

The rest is divvied up this way: Owners of six to 10 houses control 4% of California investment houses. Investors with 11 to 50 houses own 3% of this Golden State housing group. And 51 or more? Only 2% of investment houses."

Re: 19% of California houses are owned by investors

#115

Post by taeric »

dgrcode wrote: post #109
taeric wrote: post #35

Earlier quoted context omitted.

It would probably be easier to understand if worded the other way? 81% of California houses are owner occupied.

I think the 81% group would also include unocuppied houses, right?

I have to confess I'm not sure. :( Searching for vacancy rate shows that is around 9%. I would expect these are owned by someone, though, such that I don't know why they would not be counted as investments?

Doing the same search for "owner occupied" shows only around 50%, though. I don't know where to get the data that teases apart housing units and standalone houses.

Re: 19% of California houses are owned by investors

#116

Post by astrobiased »

What I find odd is that definition of "investor" is not that clear. When you click through the links you get blocked at the data provider with no context. There's also a link to another post by the same news provider. When clicking through reference to the data source, the link doesn't work.

Re: 19% of California houses are owned by investors

#117

Post by grafmax »

tptacek wrote: post #113
grafmax wrote: post #111

Earlier quoted context omitted.

Professional property managers can scale the cost of ownership in a way individual owners can’t. Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation. As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation. Ultimately, this isn't just a supply-…

I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.

A portion of the investor class may divest through deregulation as the character of the housing market changes. But the fundamental issue is the presence of the investor class itself. Markets don’t redistribute wealth equitably; they concentrate it. This will continue even if markets acquire new character through deregulation. At best deregulation can change the membership of the investor class. It does not eliminate the investor class.

In other words you are looking at it from a supply side but ignoring the wealth distribution of buyers. Wealth has further concentrated among the richest buyers over the past few years, while the poorest have grown poor, leading to higher prices for everyone. That’s the cause, not NIMBYism, which has been around forever. It’s a wealth redistribution issue not a deregulation issue.

Re: 19% of California houses are owned by investors

#118

Post by tptacek »

grafmax wrote: post #117
tptacek wrote: post #113

Earlier quoted context omitted.

I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.

A portion of the investor class may divest through deregulation as the character of the housing market changes. But the fundamental issue is the presence of the investor class itself. Markets don’t redistribute wealth equitably; they concentrate it. This will continue even if markets acquire new character through deregulation. At best deregulation can change the membership of the investor class. It does not eliminate…

You're not answering the question I'm asking. I'm not looking for a treatise. I'm just asking how investors keeping vacant supply off the market could make money in the face of increasing supply. They have to pay to hold the houses. They're not earning income from the houses (they're vacant). Supply of the houses is increasing. Fill in the "???" before "profit".

Re: 19% of California houses are owned by investors

#119

Post by insane_dreamer »

That number needs to be broken down between institutional investors and "regular" landlords who own a second property which they rent out (and likely either just covers the mortgage/taxes/upkeep, or is an older already-paid-for property i.e., inherited). The former is a business, the latter is not.

Re: 19% of California houses are owned by investors

#120

Post by grafmax »

tptacek wrote: post #118
grafmax wrote: post #117

Earlier quoted context omitted.

A portion of the investor class may divest through deregulation as the character of the housing market changes. But the fundamental issue is the presence of the investor class itself. Markets don’t redistribute wealth equitably; they concentrate it. This will continue even if markets acquire new character through deregulation. At best deregulation can change the membership of the investor class. It does not eliminate…

You're not answering the question I'm asking. I'm not looking for a treatise. I'm just asking how investors keeping vacant supply off the market could make money in the face of increasing supply. They have to pay to hold the houses. They're not earning income from the houses (they're vacant). Supply of the houses is increasing. Fill in the "???" before "profit".

If investors keep houses off the market that artificially reduces supply. All they need is for the increased prices to outweigh any price decline that comes from increased supply. This can happen with or without vacancies for example by having pricing power in the rental market.

House vacancies aren’t my central argument however - they are a symptom of the wealth distribution problem causing our housing crisis.

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