The Woodlands Edition | July 2022

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NEW NEIGHBORS NEW NEIGHBORS HOMES PURCHASED BY INVESTMENT FIRMS AS OF JUNE 2022

77380

77381

77382

77384 77385 77386

77389

Zip Code

Montgomery Central Appraisal District data shows the ve institutional investors, including their subsidiaries, with the most purchases in The Woodlands area have concentrated purchases in the 77385 and 77386.

American Homes 4 Rent

134

Progress Residential

13 14

4 3

32 30

93 57

10 18

FirstKey Homes

Invitation Homes

7 HOMES

Tricon Residential

Total:

77384

111

389

111 HOMES

SOURCES: KINDER INSTITUTE FOR URBAN RESEARCH AT RICE UNIVERSITY, MONTGOMERY CENTRAL APPRAISAL DISTRICT COMMUNITY IMPACT NEWSPAPER

1488

10 HOMES

Alden Bridge

A DIFFERENT APPROACH While many investors purchase individual homes to lease, other communities are built with renting in mind. Centro Modern in Shenandoah is one such community under construction with 80 units for rent.

77382

39 HOMES

Shenandoah

Cochran's Crossing

Sterling Ridge

77385

77381

Panther Creek

Oak Ridge North

389 HOMES

42 HOMES

47 HOMES

KYLEE HAUETERCOMMUNITY IMPACT NEWSPAPER

Creekside Park

77380

77389*

77386

to pay cash and can oer services the average homebuyer cannot. Firms that have bought prop- erties have also been investing into developing entire build-to- rent communities. David Howard, executive director of the National Rental Home Council, a nonprot that represents the single-fam- ily rental home industry, said 3% of NRHC companies were building homes for rent two years ago, com- pared to 26% in 2022. Saher Said, a Realtor with Compass Real Estate who is based in The Wood- lands, said one example of a local community built strictly for leasing properties is Amber Pines at Foster’s Ridge, a neighborhood of about 100 houses north of FM 1488. Another build-to-rent commu- nity is Centro Modern, east of I-45 in Shenandoah. It was originally planned as single-family homes to purchase but has been managed by Bridge Tower as a build-to-rent com- munity since 2021, District Property Manager Matlyn Smith said. The development is starting with 80 units in two oor plans including options with two or three stories, leases with terms of 12-24 months and monthly rent of $2,500-$2,800. Smith said rental properties are a good t for many people moving to the Greater Houston area, and the property managers at Centro Mod- ern work with the local homeowners association to ensure it maintains similar standards.

“I think it’s partially a new concept; it gives people an option when they’re not ready to buy and want the exibil- ity of a lease,” Smith said. An April study conducted by researchers at the University of Califor- nia at Berkeley found American Homes 4 Rent and Canada-based Tricon Resi- dential have invested millions of dol- lars as of the fourth quarter of 2021 in developing U.S. homes for rent. American Homes 4 Rent owns 336 homes in Montgomery County in its own name and through limited lia- bility corporations listed on the U.S. Securities and Exchange Commis- sion lings, HCAD data shows, while Tricon Residential owns 231 Mont- gomery County properties. Evangelou said large millennial and minority renter populations and still-aordable housing contributed to the metro area’s status as a target for investors. “To put it simply, Texas ts all the desired criteria,” she said. Low supply, high prices Institutional buying trends emerged as the housing industry is facing record lows in inventory. In May, the HAR reported the Houston-area market had 1.6 months of supply—the highest mark since October 2021 yet below the six-month mark the NAR considers a “balanced” market. HAR Chair Jen- nifer Wauhob said in a June 15 news release that conditions “appeared to be calming.” Institutional buyers tend to target

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*HARRIS COUNTY

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Haley Garcia, broker associate with Garcia Real Estate Group in The Woodlands, said a concentra- tion of interest in areas near the Grand Parkway is related to growth in that corridor. “East of [I-]45, those areas are booming and very desirable, and I think it’s because the [Grand Park- way] has made everything so much more easily accessible, … so they’re not on a lone island,” Garcia said. However, homes within The Wood- lands Township are somewhat pro- tected from this trend because of the higher prices, area real estate experts said. Beth Ferester, a Realtor with Corcoran Ferester Realty in The Woodlands, said she has seen the rm’s presence grow in the region. “I have been shocked that there are so many investors in this inated market,” Ferester said. “They must know something about people want- ing to just lease instead of purchase in the future.” Rise in communities for rent Evangelou said the trend for invest- ment rms to buy properties causes rst-time, low-income buyers to face steeper competition for home pur- chases as rms tend to target the same properties they would buy, are willing

“These are not mom and pop buy- ers,” said Nadia Evangelou, the direc- tor of forecasting at the National Association of Realtors. “They look to buy properties and communi- ties on a large scale and make prot from them.” Texas leads the nation in institu- tional buying with 28% of single-fam- ily homes purchased by rms in 2021—more than double the national average of 13%, according to data from the NAR. The state also saw the second-largest percent increase in properties bought by institutional buyers from 2020-21, climbing 4.6 percentage points. The NAR reported institutional buyers purchased 29% of single-fam- ily properties purchased in Montgom- ery County and 38% of single-family properties purchased in Harris County in 2021. Property data from the Montgom- ery Central Appraisal District shows 1,251 homes in Montgomery County and 645 homes in seven ZIP codes in The Woodlands area are owned by ve institutional buyers and their subsidiaries as of June 2022: Amer- ican Homes 4 Rent, Progress Resi- dential, FirstKey Homes, Invitation Homes and Tricon Residential.

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