Wall Street corporations have been quietly buying up tens of thousands of single-family homes across the U.S. and converting them to rentals, a model that’s been hugely profitable for them over the past decade as home prices and rents in major metro areas have soared. Law360 Real Estate Authority took a deep dive into the market in Phoenix, the nation’s fifth-largest city, and found that a group of 25 companies collectively own nearly one in five single-family rental homes there.
Over the course of several months, using Maricopa County public records, Law360 has identified and mapped more than 7,500 Phoenix homes that are owned by the biggest players in town, including Invitation Homes and Progress Residential.
The shift in ownership has had myriad impacts in Phoenix. As more homes are converted to long-term rentals, that has taken for-sale stock out of the market, putting additional upward pressure on home prices and making it that much harder for first-time buyers to own a home. Law360 found that corporations are also often aggressive during the buying and inspection phases, creating headaches for sellers. And when it comes to the renters, many have experienced problems that experts say could have been avoided had the landlord not been an out-of-town large corporation.
Meanwhile, there’s been little attempt at the local, state or federal level to regulate such deals, and homeowners associations in Phoenix have done little on the regulatory front. And while buyers have hit the pause button in recent months amid rising interest rates and recession fears, the major players in the space remain confident in the long-term viability of the single-family rental model.