Brevard county is taking advantage of Wall Street speculation (Palm Bay: sale, real estate)

[Kid Ashbury]

Originally Posted by kokonutty

Perspective: Institutional investors now own about 300,000 single family houses in the United States where 80 million such houses exist. That is just over one third of one percent. Wall Street has little to do with price appreciation of the single family market.

On the other hand, if you wish to consider "Wall Street" responsible for the current low mortgage lending rates, those are largely responsible for increased demand by typical American buyers.

Curious where you pulled this 300,000 number from. What's the source?

[1insider]

That's the same number quoted here from a presentation by Invitation Homes.

From the article:

"According to data from Invitation Homes, there are 128 million households and 62% are owned homes, while 38% are rented. Out of the rental batch of 49 million units, 35% are Single-family rentals, 62% are apartments, and 4% are mobile homes and others. In the investor presentation, institutional owners are just at 300,000 units for single-family homes vs. 16.2 million which are called “Moms and Pops”."

[Kid Ashbury]

Originally Posted by 1insider

That's the same number quoted here from a presentation by Invitation Homes.

From the article:

"According to data from Invitation Homes, there are 128 million households and 62% are owned homes, while 38% are rented. Out of the rental batch of 49 million units, 35% are Single-family rentals, 62% are apartments, and 4% are mobile homes and others. In the investor presentation, institutional owners are just at 300,000 units for single-family homes vs. 16.2 million which are called “Moms and Pops”."

Appreciate the response and the source.

The thing is 39,000 single family homes were purchased by institutional investors in Q1 of 2021 alone, so only 300,000 single family homes altogether being owned by institutional investors just seems low. I'll do further research. Thanks again

[kokonutty]

Originally Posted by 1insider

That's the same number quoted here from a presentation by Invitation Homes.

From the article:

"According to data from Invitation Homes, there are 128 million households and 62% are owned homes, while 38% are rented. Out of the rental batch of 49 million units, 35% are Single-family rentals, 62% are apartments, and 4% are mobile homes and others. In the investor presentation, institutional owners are just at 300,000 units for single-family homes vs. 16.2 million which are called “Moms and Pops”."

Yep, what he said.

[Kid Ashbury]

Originally Posted by 1insider

That's the same number quoted here from a presentation by Invitation Homes.

From the article:

"According to data from Invitation Homes

One important thing here: Invitation Homes was established by Blackstone (another institutional investor) as a separate entity, but Blackrock is now a major investor in Invitation Homes.

As such, Invitation Homes has a clear motivation to kneecap the bad press that Blackrock and their industry at large has been getting for their rampant acquisitions.

Between this and the claim of just 300,000 TOTAL SFH units being owned by institutional investors and the obvious conflict of interest between Invitation Homes and Blackrock, I'm skeptical. Again, 39,000 single family homes were purchased by institutional investors in Q1 2021 alone... so it just seems fishy. I'd like to see their data set and qualifiers for what an "institutional investor" is in their analysis.

[SuiteLiving]

Originally Posted by Kid Ashbury

One important thing here: Invitation Homes was established by Blackstone (another institutional investor) as a separate entity, but Blackrock is now a major investor in Invitation Homes.

As such, Invitation Homes has a clear motivation to kneecap the bad press that Blackrock and their industry at large has been getting for their rampant acquisitions.

Between this and the claim of just 300,000 TOTAL SFH units being owned by institutional investors and the obvious conflict of interest between Invitation Homes and Blackrock, I'm skeptical. Again, 39,000 single family homes were purchased by institutional investors in Q1 2021 alone... so it just seems fishy. I'd like to see their data set and qualifiers for what an "institutional investor" is in their analysis.

Given the substantial increase in home prices over the last 8 years since the financial crisis, I would expect institutional investors to be net sellers at this point. End of one investment cycle and recycle the capital into something else.

[leastprime]

Transaction and system development charges

[1insider]

Originally Posted by SuiteLiving

Given the substantial increase in home prices over the last 8 years since the financial crisis, I would expect institutional investors to be net sellers at this point. End of one investment cycle and recycle the capital into something else.

Unless they have somewhere to redeploy the proceeds or need to reduce exposure I'm not sure why they would divest unless they expect a major decline in value. With the major increase in rents since they began their buying here (Palm Bay mainly) their cash flow on money invested has to be pretty tasty and rents are still going up.

[Nypafl4u]

Originally Posted by 1insider

Unless they have somewhere to redeploy the proceeds or need to reduce exposure I'm not sure why they would divest unless they expect a major decline in value. With the major increase in rents since they began their buying here (Palm Bay mainly) their cash flow on money invested has to be pretty tasty and rents are still going up.

I would mostly agree with this. As a smaller single family home investor, I have found it difficult to raise rents too high if there is a good paying tenant. For me, the cost of updates, paint and cleaning, usually several thousand dollars beyond any deposit held, makes for a daunting task to not renew. I feel rents will be dropping soon as people either save up to buy with low interest rates and more evictions come about as the Covid safety nets are dropped by the government. I do think we are in for some bumpy, unstable times in the not so distant future. Maybe it is a good time to sell, I just keep taking myself out of it...

[Gypsy3n8]

NyPaFl4U, we considered selling also since we can get a huge ROI on the condo after just 2 years. The problem is everything we looked at was way overpriced and it made DH appreciate what we already have in terms of our current needs and future plans.

We'll eventually end up with a SFH on the mainland, but not in this market. We were going to look at 1 place in Melbourne area and the owner was a Realtor and the home was a rental. She had the place priced $150/SF higher than all of the other comps in the area. We didn't even bother since the price was absolutely ridiculous.