Institutional landlords subject to a new federal ban on single-family home purchases have more than doubled their for-sale listings since early February, according to an analysis by real estate data provider Parcl Labs.
As of this month, institutional investors — those owning 350 or more single-family rental homes under the new law's definition — had 9,447 homes on the market, up from 4,166 at the start of February, with a total asking price of $3.1 billion, according to CNBC.
The legislation driving the shift, H.R. 6644, became law on July 11. The law bars institutional investors from purchasing additional single-family homes but does not require them to sell existing holdings. Exceptions include build-to-rent developments and a program that allows investors to buy homes to renovate and offer tenants a path to ownership.
Taken together, investors subject to the law hold an estimated 589,000 homes, a share that amounts to roughly 3.9% of all single-family rentals across the country. Among the major players — Progress Residential, Invitation Homes, AMH, Tricon, FirstKey, Amherst, and VineBrook — dispositions have outpaced acquisitions by 3,180 homes since the start of the year.
VineBrook stands out among its peers, having put approximately 1,900 homes — close to a tenth of everything it owns — up for sale at a collective asking price of $285 million. Of the two publicly traded REITs in the single-family rental space, Invitation Homes is marketing 549 homes while AMH has 536 on the market. Progress Residential, the largest landlord overall, has the fewest listings among the major players at 143 homes.
Those selling are offering discounts. Price reductions are far more common among institutional sellers: 54% of their listings carry a markdown, versus 38.7% of all for-sale homes nationwide. Markdowns among institutional sellers have deepened from roughly 3.1% to 4% of asking value since early May.
"The rate of for-sale change is something to keep an eye on," Jason Lewris, co-founder of Parcl Labs, said. "These numbers won't materialize into actual dispositions for months given how long the sales cycle can be, but it's the fastest read into institutional behavior."
Several large investors are shifting focus to build-to-rent, the activity the new law still permits. Stephen Scherr, co-president of Pretium — the parent company of Progress Residential — said last week on CNBC that private capital still has a role in housing for Americans who want to rent. Invitation Homes purchased Atlanta-based homebuilder ResiBuilt earlier this year.