If you know much about the housing market these days, you might have noticed a rather strange trend. While interest rates are still rising and the economy is struggling, large investment firms of buying up huge swatches of residential rentals.
As the Las Vegas Review-Journal reported, a recent case of this occurred this past summer. A Wall Street-backed firm, Invitation Homes, amassed a total of 264 homes in the greater Las Vegas area in a single day, July 18.
It was reported that the buy was essentially a swap of properties with another large investment firm, Starwood Capital Group, based in Miami.
According to the report, the average rental property costs $371,514 – ranging from $292,000 to the much larger $694,000. In all, Invitation Homes acquired $98 million in residential homes in a single day.
And this was only a small sliver of the deal made between the two firms. In all, 1,900 single-family rental homes were swapped, amounting to $650 million in property.
As I mentioned above, this is just one example of a growing trend taking place all across the nation.
As longtime Las Vegas real estate agent Noah Herrera noted, “They’ve turned these homes into collateralized rental obligations.” It’s kind of like the mortgage-backed securities trend seen prior to the 2008 economic crisis.
Essentially, rental properties are being traded like stocks between these large firms.
Now, the trend isn’t necessarily a bad one, although it could lead to some major economic changes.
But it also means that land ownership and small rental properties could begin to dry up. And that means another death in the American Dream.
In 2022, it was estimated that these large entities owned a mere 5 percent of rental properties. By 2030, MetLife Investment Management estimates a whopping 40 percent will be – just what the World Economic Forum wants.
As they predict, “You will own nothing. And you’ll be happy.”
Like I said, the end of the American Dream.
