Spring - Klein Edition | July 2022

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Harris County Appraisal District data showed institutional investors have made signicant purchases in the Spring and Klein area. Investor names were sourced from the Kinder Institute for Urban Research at Rice University. NEW NEIGHBORS

HOMES PURCHASED BY TOP INVESTMENT FIRMS

Total

77066

77068

77069

77070

77090

77373

77379

77388

77389

FirstKey Homes

339 282 234 188 228

24

8

7

18

17

159 38

47

18

Invitation Homes

23 12

11

4 3

27 44

26

59 94

601

62 33

4

Progress Residential

3

4

31

10

11

2

1

20

38

63

52

29

11

American Homes 4 Rent

21

17

3

9

9

104 6

20

4

Tricon Residential

47 HOMES 77389

Total

1,271

91

36

18

118

94

479

197

191

47

45

SOURCES: HARRIS COUNTY APPRAISAL DISTRICT, KINDER INSTITUTE FOR URBAN RESEARCH AT RICE UNIVERSITYCOMMUNITY IMPACT NEWSPAPER

David Howard, executive director of the National Rental Home Council, said the term “institutional investors” is a catch-all for companies large and small as well as individuals. According to Howard, out of 23 million single-family rental homes in the U.S., 300,000 are owned by large companies, or around 1.3%. Locally, NAR data showed 38% of single-family properties purchased in Harris County in 2021 were bought by institutional buyers. Property data from the Harris County Appraisal Dis- trict shows nearly 1,300 homes in the nine ZIP codes that make up the Spring and Klein area are owned by ve insti- tutional buyers and their subsidiaries: American Homes 4 Rent, Progress Res- idential, FirstKey Homes, Invitation Homes and Tricon Residential. In ZIP code 77373, 479 homes are owned by these ve major institu- tional investors—the most of any area ZIP code. Meanwhile, data shows FirstKey Homes has the strongest foothold with 339 homes owned

across the area’s nine ZIP codes. Additionally, while a majority of households in the Spring area were owner occupied in 2020, ZIP codes 77070 and 77090 had a majority of renter-occupied housing units, according to American Community Survey ve-year estimates. Evangelou said the trend 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. “If you’re [selling] at an entry-level price point, you’re going to get 20-30 oers, and cash is king because they don’t require an appraisal; they’re waiving inspections; and it’s an eas- ier close. So that’s when investors can just steamroll over a newly married couple,” said Jenny Hill, a real estate agent with Coldwell Banker Realty. Build to rent Firms have also been developing entire build-to-rent communities. Howard said two years ago, 3% of

99 TOLL

2920

77388

77373

479 HOMES

197 HOMES

191 HOMES

77379

249

1960

77068

18 HOMES 77069

77090

forecasting at the National Association of

77070

36 HOMES

94 HOMES

118 HOMES

Realtors, described the rms targeting properties as “Wall Street-level” buyers looking for an investment. “These are not mom and pop buy-

91 HOMES 77066

N

ers. They look to buy properties and communities on a large scale and make prot from them,” Evangelou said. Texas leads the nation in institutional buying with 28% of single-family homes purchased by rms—more than double the national average of 13%. The state also saw the second-largest percent increase in properties bought by institutional buyers from 2020-21, climbing 4.6%.

Large investment rms are convert- ing single-family homes to rentals and building communities to rent in Spring and Klein to help the meet rising rental demand. However, for Tillis and many others, the supply is still not enough. “It has been so disheartening,” she said. “The prices are so high, and the criteria is ridiculous. Things like this is what forces people who are paycheck to paycheck to become homeless.” The HAR reported June 15 that year- over-year rentals increased 24.8% from May 2021 to May 2022. While ris- ing mortgages and low inventory are contributing to the trend, experts said potential homebuyers are also facing competition from real estate invest- ment rms, or institutional buyers, buying properties to sell or lease out as rentals of their own. “Buyers today are having to make hard decisions to not buy and stay in rentals due to median home pric- ing increasing, higher interest rates, higher taxes and [ination]—all of which is making a need for more rental options to be on the ground,” said Paula Wehring, a Realtor with the Paula Wehring Group. Institutional investors Nadia Evangelou, the director of

RENTERS VS. OWNERS

While a majority of households in the Spring- and Klein-area’s nine ZIP codes were owner occupied in 2020, data shows ZIP codes 77070 and 77090 had a majority of renter-occupied housing units.

Owner-occupied housing units

Renter-occupied housing units

77066

77068

77069

71.8% 28.2% Total households: 11,763 48.6% 51.4% Total households: 21,174 77.2% 22.8% Total households: 27,588

67.2% 32.8% Total households: 3,721 25.6% 74.4% Total households: 15,417 72.1% 27.9% Total households: 16,796

55.7% 44.3% Total households: 8,019 70.5% 29.5% Total households: 20,656 81.1% 19.9% Total households: 12,761

77070

77090

77373

77379

77388

77389

SOURCE: AMERICAN COMMUNITY SURVEY 2020 FIVEYEAR ESTIMATESCOMMUNITY IMPACT NEWSPAPER

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