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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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