2022 REAL ESTATE EDITION
BIG BUSINESS
Texas leads the nation in institutional buying and saw the second-largest percentage increase in properties bought by institutional buyers from 2020-21, climbing 4.6 percentage points .
Build-to-rent communities Firms that have bought properties have also been investing into devel- oping build-to-rent communities. David Howard, executive director of the National Rental Home Council, said two years ago 3% of NRHC com- panies were building homes for rent, compared to 26% in 2022. According to Kriegel, many of his clients see build-to-rent communities as opportunities to see large returns on their investments. “[Build-to-rent] allows investors to control cost, absorption rate, so it’s going to be the fastest-growing seg- ment for the next ve years,” he said. Locally, developer Wan Bridge has already brought three such commu- nities into the market—Regent Square Brownstones, Villas at Kings Harbor and Clearwater at Balmoral. According to Wan Bridge CEO Ting Qiao, the company’s build-to-rent communities remove many of the hassles faced by homeowners. “Wan Bridge’s property manage- ment team provides ve-star service to all residents, which includes land- scaping service, air lter replacement,
pest control, plumbing and electrical service,” Qiao said in a statement. Rose Miller noted she does not foresee build-to-rent communities such as those developed by Wan Bridge—which cost $2,400-$2,800 per month—aecting local rental prices. Currently, Rose Miller said the Lake Houston area’s rental market is roughly 95% occupied, which indi- cates a large enough demand to jus- tify additional rental properties. Long-term impacts Although rms have recently piv- oted towards build-to-rent commu- nities, Kriegel said their practice of purchasing homes will continue. “It’s not going anywhere,” he said. Wauhob said the HAR is upscaling its eort to track institutional buying and build-to-rent options. She said the organization is looking at home- ownership levels and home values, especially as increased prices aect appraisals and property taxes. While local leaders have potential options to limit development through rent stabilization, which impacts prof- its, Kriegel said developers and rms
IN 2021,
13% of homes purchased in the United States were bought by investment rms. 38% of homes purchased in Harris County were bought by investment rms. 59,000 houses were built to rent nationwide in 2021, the
28% of homes purchased in Texas were bought by investment rms. 29% of homes purchased in Montgomery County were bought by investment rms. $227,389 is the average value of homes owned by institutional
13%
28%
38%
29%
investors in the Lake Houston area. largest amount since 2003. SOURCES: HARRIS COUNTY APPRAISAL DISTRICT, MONTGOMERY COUNTY APPRAISAL DISTRICT, NATIONAL ASSOCIATION OF REALTORS, KINDER INSTITUTE FOR URBAN RESEARCH AT RICE UNIVERSITYCOMMUNITY IMPACT NEWSPAPER
owned by rms by 2030, according to data from investment management rm Metlife Investment Management. “There’s no negotiating with an institutional buyer,” Kriegel said. “Anyone who’s buying for under $400,000 will need to understand that.”
would always nd loopholes. “You’re dealing with corporate America; they’re going to nd ways to be able to develop and build stu,” Kriegel said. Kriegel suggested trends in institu- tional investment into single-family properties could change the dynamic of homeownership for both individual buyers and real estate agents across the country. National trends could see at least 40% of single-family homes
For more information, visit communityimpact.com .
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LAKE HOUSTON HUMBLE KINGWOOD EDITION • JULY 2022
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