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Invitation Homes

This one company owns 10,000+ homes in California (interactive map)

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Wall Street has invaded Main Street. It’s truly stunning to see that a company like Invitation Homes owns over 10,000 units in California. Today, I want to debut an interactive map I made to show where these homes are located.

Wood background with white rectangle with today's blog post title.

UPCOMING (PUBLIC) SPEAKING GIGS:
12/08/23 Free Q&A event for appraisers only (on private work)
      11am PST one hour – click link here (see pass code)
      Meeting ID: 832 2414 3890 Passcode: 007
01/31/24 Joel Wright & Mike Gobbi Event 9am (on Zoom here)
2/09/24 PCAR WCR Event (details TBA)
3/11/24 Yolo Association of Realtors (details TBA)
4/25/24 HomeSmart iCare Realty (details TBA)

UPDATED MAP on 12/18/2023

I updated my post title to say 10,000+ instead of 9,000+ in light of new information. This map now includes nearly 1,600 extra units. Invitation Homes merged with Starwood Waypoint years ago, and I found an extra 1,586 units owned by Starwood Waypoint. These units are now being included in what Invitation Homes owns. Frankly, this number is likely still conservative, but I’ll keep adding as I get better data (difficult to track).

INTERVIEW ON KQED on 12/19/2023:

KQED did a one hour special on Invitation Homes, and I was honored to be a guest along with a legislator and writer for Time Magazine. Listen here.

CHECK OUT THIS INTERACTIVE MAP

I created this map to help show exactly where Invitation Homes owns properties throughout California. Scroll through Sacramento, Los Angeles, San Bernardino, and Riverside County in particular. Or see map here.

Invitation Homes owns 10,761 units throughout many counties, but it’s mostly Greater Sacramento and Southern California. Nothing in the middle.

Counties with Largest Number of Invitation Homes Units:

– Los Angeles (3,017)
– Riverside (2,353)
– Sacramento (1,881)
– San Bernardino (1,383)
– Solano (774)
– Ventura (289)
– Placer (212)
– San Diego (216)
– Other (636)

The wider Sacramento region has 30.21% (or 3,255) of Invitation Homes units owned in California. This wider area includes Solano and San Joaquin. If it’s just Sacramento, Placer, Yolo, and El Dorado, that would be 20.2% of all units in California (2,180 units).

What’s mind-blowing to me is to click the map and zoom in to see how many units they own in various neighborhoods. Yikes.

SOME THOUGHTS

1) MAIN STREET INVADING WALL STREET: It’s sobering to see this company’s holdings on the neighborhood level because then it starts to feel really personal. This is a very local trend – not just a national stat where we can say Invitation Homes owns about 80,000 units across the country. Anyway, there needs to be discussion here. Is this what America should look like? Should big companies become giant landlords? How does this evolve in the future? How does this affect affordability and neighborhoods?

2) NOT BLACKSTONE: Often we see Invitation Homes confused as Blackstone, but Invitation Homes is not Blackstone. There used to be an affiliation with Blackstone, but that’s no longer the case.

3) NOT BUYING RIGHT NOW: The bulk of these units were purchased five to eleven years ago. I’m not aware of any location in the state where Invitation Homes is currently acquiring a large number of units. In Sacramento, Invitation Homes went on a rampage in 2012 and 2013, and purchased more steadily in subsequent years. The last unit they bought was in mid-2022 as far as I can tell.

4) NOT SELLING MUCH: They haven’t sold a massive amount through the years other than some non-performing assets. Many have said things like, “Bro, just wait until they sell,” but they really might not do that.

5) HOW I GOT THIS DATA: First, Invitation Homes is difficult to track because they have so many DBAs (over 50 in Sacramento alone). This means it’s extremely challenging to account for their properties. I honestly have wanted to share a map like this for years, but I finally cracked the code to figure out how to account for their properties by using the tax billing address instead of the owner name. 9,175 properties have the corporate headquarters in Dallas, TX as the listed tax address, and I found additional units with the Starwood Waypoint address in Arizona as the tax billing address (1,586 units).

Are there more? It’s possible there are other units not on my list, but this is the best way I’ve found so far to account for the properties. If anyone knows a better way to search, or if there are other properties with a different owner address, speak up. 

NOTE: I scrubbed a few properties on the list due to address issues, so my map has 10,696 out of 10,761 units.

6) SHARING: You can share by linking to this post, linking to the map, embedding the map on your website (see code below), or take screenshots of images to share anywhere you want. I’d appreciate being cited since this took a good deal of effort. Let me know if you have any questions.

Code for embedding:

<iframe src=”https://www.google.com/maps/d/embed?mid=1SClN1Z5VG_ESHimkjNH4S1STDHacUAE&ehbc=2E312F” width=”640″ height=”480″></iframe>

BLAMING BIG FUNDS ONLY (AN UPDATE):

I’ve had so many conversations these past days, and I wanted to bring something up. If we blame institutional investors for all the problems we are having in the housing market, that takes attention off other things that need to be talked about. In short, let’s have this conversation for sure, but let’s also not blame Invitation Homes for a lack of affordability. That’s going too far, and it doesn’t leave any room to engage with other serious issues and ideas about housing policy needing to change (zoning, permit fees, etc…). I recommend using this research as a springboard for conversation for what needs to change in housing. Let’s absolutely talk about investment funds, but let’s also not get stuck there only.

Thanks for being here.

Questions: What stands out to you most about the map or information I shared today? I’d love to hear.

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Tech companies & Wall Street targeting residential real estate

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Tech companies and investment funds have their eye on residential housing. I wrote about this a few months ago and wanted to do a follow-up piece. Here are some things on my mind as well as fresh visuals. Any thoughts?

TWO THINGS:

1) iBuyers are on a rampage:

The iBuyer model has been on a buying spree in many parts of the country. They are purchasing to flip and here is a breakdown of their activity in the Sacramento region based on Tax Records (Realist).

  • Opendoor, Zillow, and Redfin own 690 units in the region.
  • Opendoor and Zillow each own about 330 properties.
  • The average price of acquisition was $555,000.
  • The median price of acquisition was $545,000.
  • Besides a few outliers they are NOT targeting the luxury price point.
  • iBuyers represent 6.4% of all listings and pendings right now.
  • The iBuyer model does not represent 93.6% of the active market.
  • Acquisitions are spread throughout with half of purchases below the regional median price and half above.

2) Invitation Homes is back:

I reported a few months ago that Invitation Homes is back and since May they’ve purchased 77 units in the Sacramento region. In 2012 and 2013 they bought tens of thousands of units across the country in many markets. At the time they were backed by Blackstone, but these days they are not affiliated with Blackstone.

What is Invitation Homes buying?

  • They purchased 77 units since May 2021.
  • They’ve targeted homes typically between $450-550K.
  • 74% of their acquisitions have been under $500K.
  • They bought 0.5% of all MLS sales since May (half of one percent).
  • 88% of their purchases had an MLS number, which means the bulk of these sales were publicly listed for sale.
  • Invitation Homes is definitely competing with first-time buyers even though overall the fund doesn’t have a massive footprint in the market.

TAKEAWAYS:

1) Huge rent growth is propelling big funds: Having lofty rent gains in recent years has caught the attention of big investors and is essentially allowing them to play the market these days. It’s wild to think investors can presumably make the numbers work after ten years of price growth.

2) Hype vs Reality: Often the narrative is that investors are dominating the market and buying everything. For instance, there were sensational tales a few months back about Blackrock purchasing way above market value, but I have yet to see any data to back up those claims (I’m open ears if someone has something). Anyway, there is no mistaking growing interest from tech companies and Wall Street within residential real estate and we need to watch what they do. But we also need to keep sensational narratives in check.

3) Profit and Convenience: The iBuyer model is nowhere near a dominant force in the marketplace, but we’ve seen exponential growth over these past three quarters. A dissertation can be written on what these companies are doing, but I want to make a simple point. I often hear about how this model is designed to help make things more efficient for consumers, but let’s not forget these companies are here to infiltrate the existing real estate model to make profit. So in the midst of all the slick advertisements let’s be real about the big focus, which is to make money off consumers.

Thanks for being here.

SHARING POLICY: You can share my stats and visuals above, but please attribute the source. Here are 6 ways to share my content (not copy verbatim).

Questions: Do we want Wall Street and tech companies to own more of the real estate process? Is this a good thing for the public?

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What does the market expect? (a critical question to ask in real estate)

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What does the market expect? That’s one of the best questions we can ask ourselves in real estate. Why? Because it helps us keep the focus on what buyers actually demand in certain neighborhoods and price ranges. In other words, what are buyers really willing to pay more or less for in a neighborhood? Being in tune with that is definitely one of the key aspects of coming up with a credible value.

Market expectations - Sacramento Appraisal Blog

Pool Example: Take a look at the table below to see how some areas and price ranges in Sacramento have far more built-in pools than others.

Market expectations pool example by Sacramento Appraisal Blog

Key Point: When built-in pools are more common in some neighborhoods and price ranges we can probably say the market expects a pool, right? This is especially true at the higher end of the price spectrum where over 70% of homes have a pool. In contrast, some areas of town have less than 1% of homes with a built-in pool, and it’s safe to say the market doesn’t expect a built-in pool in those areas. This doesn’t mean the pool is worth nothing in those places, but if anything it’s a reminder to really consider that a pool might be worth far less or more in some areas than others. While it’s tempting to always give a token $10,000 adjustment for a pool, based on the data above alone, that adjustment probably doesn’t make sense for every neighborhood because of differing expectations.

Not Just About Pools: This conversation isn’t just about built-in pools because we have to ask what the market expects for things like upgrades, square footage, condition, lot size, architectural design, bedroom count, garage spaces, landscaping, etc… As much as we’d like instant answers, there really isn’t a quick guide to understand what the market expects without immersing ourselves in comparing sales, talking with buyers and other real estate professionals, and crunching numbers.

Two Mentions: I’m honored to share a couple of recent media mentions. I was quoted in Inman SF Bay Area in “Sacramento housing boosted by Bay Area refugees” and in RealtyTrac’s June Housing News Report (PDF – pg 17-21).

Blackstone: One more thing. A recent article talked about the private equity fund Blackstone (Invitation Homes) selling off some of its homes directly to tenants. As you probably know, Blackstone purchased thousands of homes in the Sacramento market several years ago. They continue to buy today, but their purchase volume is minimal and nowhere near what it used to be. Anyway, the article states they would likely sell about 5% of their inventory this year directly to tenants. Whether that’s true for the Sacramento market or not is to be seen, but it’s worth watching closely. Keep in mind many landlords are selling straight to their tenants right now instead of listing on MLS. In short, this isn’t just a Blackstone thing.

Questions: How do you get a sense of what the market expects in a neighborhood? Any advice you’d give on how to better understand market expectations? Did I miss anything? I’d love to hear your take.

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