All cash, no inspection, signed contract 12 hours after the home goes on the market – Wall Street REIT’s have moved to the suburbs. Wall Street’s big investors have spent about $40 Billion buying 200,000 homes, renovating them, and building rental-management businesses according to Green Street Advisors. Blackstone’s Invitation Homes spent an average of $25,000 per home on renovation. This mass home buying began a decade ago with the financial crisis. The Middle Class couldn’t afford to buy a home so if they wanted the suburban life needed to rent. Problem is the renters were not prepared for Wall Street’s year-over-year increased earnings. Renewed leases increase 3 to 3.5%, or more. The Wall Street Journal’s assessment of renting versus buying assumed 10% down payments, 30-year fixed rate mortgages plus taxes and insurance, concluding renters were paying 32% more than the monthly ownership cost, which today is spurring home building. But if the new urban-dwelling Baby Boomers start to miss the suburbs, will it cause another paradigm shift?
12 Hour Home Sales
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