Institutional SFR Share Up in Non-Primary Markets

Blomquist: “Although the giant operators in this industry have settled down in terms of activity, there is still a lot of churn beneath the surface with the small to mid-tier operators.”

IRVINE, CA—Counter to the nationwide trend, the institutional-investor share of single-family-home purchases increased from a year ago 31% in 37% of zip codes analyzed in ATTOM Data Solutions’ latest report. The zip codes on the rise for single-family-rental purchases include those in secondary and tertiary markets, such as Dayton, OH; Detroit; Memphis; Chattanooga, TN; and Chicago.

“The big-four institutional investors— Invitation Homes/Starwood, American Homes 4 Rent, Progress Residential and Tricon American Homes, who all own tens of thousands of single-family homes—are no longer in full acquisition mode, but are now in portfolio-optimization mode, culling poor-performing rentals from their inventory and selectively adding inventory that they believe will perform well,” Daren Blomquist, SVP for ATTOM Data Solutions, tells GlobeSt.com. Blomquist adds that below that top-tier level of institutional investors, however, many single-family-rental investors who own anywhere from a few dozen to a few thousand single-family rentals are still in full acquisition mode, and these smaller operators are nimbler and more willing and able to shift strategy as the housing market shifts.