As the housing crisis escalates, the world’s largest real estate company and the country’s largest landlord buy 17,000 homes for $6 billion.
Blackstone closed the deal with single-family rental company Home Partners of America. The Wall Street Journal [WSJ] reported June 22 and is moving toward becoming the nation’s only home-leasing company.
For their part, small single-family homeowners tend to sell their homes because of pandemic losses and take them on leases in hopes of repurchasing them.
“As rental-home investors around the U.S. snap up single-family houses, some investors are buying homes through sale-leaseback transactions, which offer struggling homeowners a way to pay off debt while staying in their home,” WSJ writes.
“But many experts worry they may never be homeowners again,” it adds.
In this context, more than 4 million Americans say they fear eviction or foreclosure in the coming months, noted the June 16 Chicago Tribune.
According to studies by Harvard University’s Joint Center for Housing Studies, the nation’s housing availability and affordability crisis can be expected to worsen significantly in the wake of the pandemic.
“The unprecedented events of 2020 both exposed and amplified the impacts of unequal access to decent, affordable housing,” the report states.
And also, “These disparities are likely to persist even as the economy recovers, with many lower-income households slow to regain their financial footing and facing possible eviction or foreclosure.”
Concurrent with the crisis facing small homeowners, the real estate market is growing considerably, reaching levels not seen in the last 14 years.
This business trend drove “a frenzy among 200 companies and investment firms that have entered the house hunt,” the alternative media Zerohedge quotes.
The housing shortage and the increase in virtual work have driven up the cost of homes, making the market a bit slower but not slowing it down.
Blackstone made about $7 billion from its stake in Invitation Homes, a company it turned into the largest single-family landlord, more than doubling its money, according to Bloomberg.
According to the National Association of Realtors (NAR), sales prices for existing homes reached a record $350,000, up 24% over the past year, while the percentage for those priced close to $1 million increased 10 times as much.
Estimates indicate that at least 5.5 million new units need to be built to maintain the demand and affordability of homeownership over the next 10 years.
“The scale of underbuilding and the existing demand-supply gap is enormous and will require a major national commitment to build more housing of all types,” wrote specialists at Rosen Consulting Group in their report for NAR.