The For Sale sign goes up. The house looks promising so you immediately schedule an appointment but before you can park your car in the driveway, the seller accepts a cash offer with no inspections. About a month later, another sign then appears on the same property: For Rent. For the first-time home owner, this is not a good sign. But in many metropolitan areas, this is the new normal and the new buyers are not single families; they are investment firms with Wall Street ties. Who are they and how did they find their way to neighborhoods like yours?
Companies like Invitation Homes, the single family real estate management arm of the Blackstone Group, B. Wayne Hughes’ American Homes 4 Rent, Colony Starwood Homes, Progress Residential, and Streetlane Homes are the firms buying up homes by the hundreds. They began during the recession to buy homes in foreclosure in cities like Atlanta, Phoenix, and Las Vegas, all over Florida, Chicago, and even Minneapolis. They added other homes in growing communities around cities like Nashville, Denver, and Seattle by buying out competitors or building their own to sell. Many renters are happy with their company’s performance. (Read more about this here.) The Wall Street Journal reported that Invitation Homes spent “$25,000 fixing up each of the foreclosed homes it bought…and helped speed the recovery of some of the regions hardest hit by the housing crisis.”
However, not all renters are satisfied with their landlords. Some complaints concern home maintenance such as broken plumbing or electrical problems or reneging on finishing rooms like a second bathroom. Others have difficulty with high rent increases. (See here.) Like any company, most of these large national companies want to serve their customers well. Sometimes that takes time to learn the business.
In the meantime, they do impact the community. When these impersonal real estate companies outbid or buy homes with cash and replace it as a rental unit, they reduce the inventory of affordable housing. Some aging homeowners who may be interested in downsizing may decide to age in place because available housing does not meet their needs. Young families are often frustrated with high rents, few houses with needed features or homes priced beyond their value or budget so they stay put until something becomes available. The recession ten years ago affected the home building industry as well. When the economy began to turn around, builders focused more on luxury homes and were unable to keep up with the growing demand of more affordable housing. According to current reports, change is coming. Builders are building. Check with your local Realtor to find out what’s new in your locale.
Credit: photos-public-domain.com for both photos
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