‘Mega’ property investors snap up Seattle homes, bucking national trend
Institutional buyers boosted their holdings by 31% in the second quarter, while the U.S. housing market cooled under high interest rates.
SEATTLE — Large institutional investors are buying up Seattle homes at a pace that defies national real estate trends slowed by high interest rates.
Between April and June, investors with portfolios of more than 100 homes — known as “mega” and large investors — purchased roughly 200 single-family residential homes in the Seattle metro area, according to Cotality economist Selma Hepp. Their holdings jumped from 770 to 1,010 homes, a 31% increase.
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Redfin reported a similar surge, finding investor purchases of Seattle homes rose 50% year over year.
“Overall, we see the same sharp increase in investor purchases in Seattle,” Hepp said.
When smaller investors are included, purchases rose 16% during the same period, Cotality found. A year earlier, about 9% of Seattle home sales went to investors, according to testimony submitted to the Washington state Senate.
The figures mark a sharp departure from the national picture. Across the U.S., investors bought about 52,000 homes in the second quarter, down 6% from 2024, according to Redfin.
“Real estate investors are pulling back for similar reasons individual homebuyers are pulling back: high borrowing costs, elevated home prices and economic uncertainty,” said Dana Anderson, author of the Redfin analysis.
Why is Seattle potentially different?
“Instead of taking owner-occupied units off the market, what may be happening is that sites are in the process of being redeveloped — giving potential buyers more opportunities,” said Steven Bourassa, director of the Washington Center for Real Estate Research.
Bourassa said state lawmakers’ push to allow denser housing, including the Legislature’s passage of the middle housing bill, could explain the trend. House Bill 1110 requires many cities to allow more housing types on lots once restricted to single-family homes. In Seattle, that means duplexes, triplexes and other middle housing must now be permitted across residential neighborhoods.
“Seattle has liberalized its zoning, making it easier to build more housing on a single-family lot,” said Daryl Fairweather, Redfin chief economist. “That’s good news for investors willing to put in the work to build a duplex or add an ADU on the lot. Seattle also has a large population of high-income earners who may be looking to become mom-and-pop landlords and build wealth through real estate.”
Hepp noted that a one-off purchase of an entire subdivision could also contributed to Seattle’s spike in single-family housing being bought by large investors.
Meanwhile, the state’s supply of homes is growing faster than demand. In July, the Northwest Multiple Listing Service reported active listings were up 37.4% year over year, climbing to 20,781 homes. Closed sales rose only 3.8% during the same period.
Nationally, private equity firms own more than 8,200 apartment buildings with over 2.2 million units — about 10% of the total, according to the nonprofit Private Equity Stakeholder Project. The group estimates 9.2% of Washington apartment units are owned by private equity.
Blackstone, the nation’s largest apartment owner, controls more than 230,000 units. In Seattle, the Daily Journal of Commerce reported this month that Blackstone entities assumed the loans for the 257-unit Polaris at Lake City, the 306-unit Polaris at Rainier Beach and the 249-unit Thai Binh apartments in the International District.
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