There’s been lots of news about outside investors roiling the market for single-family homes in San Diego, snapping up an ever larger portion of properties that come to market.
The trend especially focuses on two New York City private equity firms, Blackstone and BlackRock.
Well, now we have added evidence about private investor activity.
According to residential real estate web portal Refdin, investors were quite active in San Diego’s residential housing market this past spring.
According to the Redfin report, mom-and-pop and institutional buyers purchased nearly one-quarter (23.7%) of San Diego homes sold in the second quarter.
This percentage was just behind Miami, which boasted the highest percentage of homes sold to investors for the quarter.
By the way, Anaheim at 23% and Los Angeles at 22% were not far behind, according to the report.
Nationwide, purchases of U.S. homes rose 3.4% year over year in the quarter—the largest increase since Q2 of 2022.
Redfin reports that investors purchased $43 billion worth of homes in the second quarter, up nearly 14% from a year earlier— the biggest jump in two years.
Redfin economist Sheharyar Bokhari said one reason investors “are coming out of hibernation is to take advantage of robust demand from renters.”
“Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans,” she said in a press release, “which is fueling demand for rentals. Investors, many of whom can afford to pay in cash to avoid the sting of high mortgage rates, are cashing in on that demand.”
To view the full report, click here.
* * *
Meanwhile, Redfin in a second report notes that one in nine
U.S. homes are now valued at $1 million or more, the highest percentage ever.
That’s up from 8% last year and double the 4% share before the pandemic.
Of course, a $1 million home is old news here in San Diego, as well as the rest of coastal California.
Statewide major metro areas are pumping out million-dollar homes faster than anywhere else in the U.S.
San Diego is second behind Anaheim in terms of the percentage of homes now valued at or above $1 million.
The percentage of homes exceeding the seven-figure mark in San Diego now reaches 43%, up from 37% a year ago.
In Anaheim, by comparison, the share of homes above the $1 million mark is now 59% compared to 51% in 2023.
The share of homes in that price range in Los Angeles has reached just over 39% compared to the year-ago 35%.
According to the Redfin report, the Bay Area has a much higher share of million-dollar-plus homes than anywhere else because it has the highest home prices in the country; the median sale price there is roughly $1.5 million.
And the story nationwide?
There remain a few metro areas in the county with fairly inexpensive major metro areas (where virtually no homes are worth $1 million).
In Detroit, Cleveland, Pittsburgh and Kansas City, MO, less than 1% of homes are worth seven figures.
Prices are rising despite slow homebuying demand because of a supply shortage.
To view the full report, click here.
* * *
Before we leave the realm of residential real estate, this bit of sobering data from the California Association of Realtors, the trade organization for residential brokers and agents in the state.
The CAR reports only 14% of the state’s homebuyers could afford to purchase the $900,000-plus median-priced, existing single-family home in the second quarter, down from 17% in the first quarter of 2024 and a drop from16% in the year-ago quarter. This is according to a monthly index maintained by the organization.
Of course, the numbers were worse for San Diego, which has long suffered an affordability crisis in terms of buying a home.
Here the affordability index hovered at 11% for the quarter, on par with the 11% posted in the first quarter.
Buyers would have to earn an annual salary of $274,000 to afford that median-priced home on the market, which was $1,050,000 when the numbers were compiled.
The mortgage payment with a traditional down payment of 20% would be $6,850 a month.
Elsewhere, about one-third of the nation’s households could afford to purchase a $422,100 median-priced home, which required a minimum annual income of $110,000 to make monthly payments of $2,750.
Nationwide affordability was down from 36% a year ago.
In the second quarter, the nationwide minimum required annual income was half that of California’s for the fifth consecutive quarter.
In a second report, the CAR noted that the median price of a San Diego home sold in July dropped slightly to $1.02 million in July from $1.05 million in June.
* * *
San Diego-based Realty Income Corp. declared its 650th consecutive monthly dividend of 26 cents per share, which will be payable on Sept. 13 to shareholders on record as of Sept. 3.
The company also announced a quarterly cash dividend of 37.5 cents per share for holders of its 6% Series A preferred stock payable on Sept. 30 to those on record as of Sept. 13.
According to the boilerplate, Realty Income has consistently delivered monthly dividends since its founding in 1969.
According to the company’s press release, the business firm manages a portfolio of more than 15,000 U.S. and European properties.
* * *
San Diego-based vehicle repair data provider Mitchell has released its second quarter “Plugged-In: EV Collision Insights” report, which highlights trends in claims data for electric, hybrid and plug-in hybrid electric vehicles in the U.S. and Canada.
The report notes that while EV sales slowed in 2024, hybrid vehicles remain popular with consumers.
However, these cars can be more expensive to repair after collisions compared to internal combustion engine vehicles.
The average claim for repairable hybrids was $4,726 in the U.S., slightly lower than EVs with their larger batteries.
The report also finds that EVs use more OEM parts in repairs and have fewer instances of frame labor when compared to gasoline-powered vehicles.
For a deep dive into the report, go to the Mitchell website.
* * *
Local design and engineering firm RICK says it has acquired Armstrong & Brooks, a civil engineering firm in the Inland Empire.
The acquisition brings 11 engineering professionals to RICK’s Riverside office and strengthens their civil engineering services.
A&B founders Dennis G. Armstrong and William D. Brooks have been named associate principals at RICK, according to a news release.
RICK says it now employs more than 400 professionals in 11 offices in California, Arizona, Colorado and Nevada.
“RICK, which has been serving the Inland Empire since 1987, is excited to provide our clients with added expertise, capacity, and depth of experience,” said Kai E. Ramer, RICK president and CEO. “Our strategic expansion in the past year has led to acquisitions in the Phoenix, Las Vegas and Inland Empire markets, as well as a new office in Santa Clarita…we now have more than 400 employees…in 11 offices in California, Arizona, Colorado and Nevada.”
Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to tom.york@gmail.com.
