Today you can still be a serf. There are many billionaire corporations buying up single-family homes to turn into rentals. They want to buy your dream home and rent it back to you. (Some of these corporations, such as JP Morgan, have made their living off these typical buyers, now they want to do it again. There are even pension funds going after the homes buyers want.) Permanent rentals deprive you of the opportunity to build equity.
In addition to buying existing homes, many builders are building and selling entire neighborhoods as rentals. These builders are backed by banks and private investment firms, and plan on putting down millions to build more.
For example, D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.
There are even national corporations that buy rehab properties -- competing against local rehabbers and driving them out of the market.
Below is an example of another company seeking to propagate the serfdom movement to the masses. The company is putting up only rentals, no homes, near a rural hospital, when hospital employees are among the best paid in the area. I live about 30 minutes from Pierz.
What Can You Do?
Today's local home buyers are up against hundreds of wealthy corporations, in some cases bidding against them. You might lose your dream home to a peasant paradigm. So what do you do?
In some cases, opposition from local governments and local homeowners is one barrier to these peasant neighborhoods. But ultimately, you always have to fight for what you want. You have to take responsibility for your finances and work towards home ownership.
Dominant market forces want to predict that home ownership will decline -- but stay the course. Every successful homeowner that defies these forces is changing the equation one at a time.
The Collapse of Zillow
Zillow entered the home ownership market to flip houses. In the fall of 2021, its venture crashed because its inflationary tactic of over-paying for houses toppled it.
While it is good to have a corporation exit the market, unfortunately, corporate renters have lined up to buy Zillow's stock to turn it into rentals.
Here is a list of a few of the hundreds of companies that want to help buy your dream house and rent it back to you:
BANKERS BEHIND THE PUSH FOR SERFDOM
- J.P. Morgan Asset Management -- Banker
- BlackRock Inc -- Banker that backed Home Partners
- KKR -- Banker that backed Home Partners
- Blackstone - Investment firm, which bought Home Partners, owner of 17,000 rentals (which buyers can buy), built Invitation Homes Inc. into the largest single-family landlord following the U.S. foreclosure crisis; and led a group of investors that acquired a minority stake in Toronto-based Tricon Residential Inc., which owns and operates more than 31,000 homes and apartments.
- Centerbridge Partners LP -- Investment firm
- Allianz SE -- Insurance company acting as an investment firm
- Walker & Dunlop Inc -- A commercial real estate lender forging into suburban rentals
- Fundrise and Roofstock -- Platforms that buy and arrange for the management of rentals on behalf of individuals. Fundrise bought the DR Horton development described above.
- PCCP LLC -- A corporation that typically invests in apartment buildings and office towers, but also bought rental-home communities in the Southeast, as part of a $1 billion pact with Calstrs, California's $286.9 billion teachers' retirement system.
- Home Partners -- bought buy Blackstone bankers, Home Partners owns 17,000 rentals. The company gives tenants the option of buying their rental at a predetermined price within the first five years, although only about 20% of renters do that.
- Invitation Homes -- built by Blackstone bankers, is the largest single-family landlord following the U.S. foreclosure crisis. Blackstone exited its stake in Invitation Homes in 2019,doubling its money and making $7 billion.
- Tricon Residential -- owned in part by Blackstone bankers, owns and operates more than 31,000 homes and apartments in Canada.
- Pretium - owns around 70,000 single-family homes
- American Homes 4 Rent
BUILDERS FOR PEASANT-HOODS
- LGI Homes Inc. -- which now reports wholesale home sales to bulk buyers in its quarterly results.
- Lennar Corp. -- announced a rental venture with investment firms (including Centerbridge Partners LP and Allianz SE) to which it and potentially other builders will supply more than $4 billion of houses.
- Madison Realty Capital -- moved into rentals with clients that used to focus on developing apartment buildings and owner-occupied subdivisions. It recently closed a $110 million loan on a project in Los Angeles, where 220 of the nearly 700 home sites are being sold to investors. The original plans, derailed by the housing crash, didn't envision any rentals.
- DR Horton -- Sold the above-noted development in Texas.
- Kinloch Partners
- Taylor Morrison Home Corp\-- US's fifth largest builder, predicting rentals to become 50% of its business.
- Christopher Todd Communities in Happy Valley, AZ -- 222 one- and two-bedroom houses that were built to be rented.
FLIPPER CORPORATIONS COMPETING WITH LOCAL REHABBERS
this is one company competing against local rehabbers, helping drive them out of the market.
- Opendoor Technologies Inc -- a "computer-assisted flipper" (whatever that means), with currently about a dozen properties in Minnesota.
If You Sell a House These Days, the Buyer Might Be a Pension Fund
Built-to-Rent Suburbs are Poised to Spread Across the U.S.
So you and your descendants can always be peasants.