Latest news with #ParclLabs
Yahoo
27-07-2025
- Business
- Yahoo
Rise of ‘accidental landlords' having serious impact on America's housing supply — what owners and renters need to know
As mortgage rates remain stubbornly high and home affordability out of reach for many buyers, a new type of rental competition is emerging in some of the country's hottest housing markets. 'Worsening for-sale supply-demand conditions are creating new institutional competitors: accidental landlords,' notes a recent report by Parcl Labs. These 'accidental landlords' are homeowners who tried to sell but couldn't fetch the price they wanted — and instead have decided to rent out their homes until conditions improve. "When these home sellers cannot find buyers, they face three choices: delist and wait, cut price to find market clearing level, or convert to rental. The last option creates what Parcl Labs terms 'accidental landlords': owners who enter the single-family rental market not by design but by necessity," the Parcl Labs researchers wrote. It's a growing trend that may be quietly disrupting the single-family rental market and putting pressure on big institutional landlords like Invitation Homes, American Homes 4 Rent and Progress Residential. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how Where it's happening The phenomenon is most concentrated in the same metros where institutional landlords have historically built up large portfolios: Atlanta, Dallas, Houston, Phoenix, Tampa and Charlotte. According to Parcl Labs, those six cities represent 36.8% of all institutional single-family rental holdings nationwide. But these same cities are now seeing home listings pile up, leading to a surge in homeowners pulling their listings and turning them into rentals instead. Houston and Dallas saw the biggest increases in homes that failed to sell and were converted into rentals, followed by Tampa, Phoenix and Atlanta. Charlotte, an outlier, actually had a modest decline in the number of homes that failed to sell. Meanwhile, single-family inventory is up sharply too year-over-year, averaging a 32% increase in those key cities. This trend is part of a broader reshuffling of the U.S. housing market, where fewer people are able or willing to sell due to high mortgage rates. Many owners who bought or refinanced during the pandemic at sub-4% interest rates are reluctant to sell and take on a new loan at 7% or more. That so-called "lock-in effect" is forcing a growing number of people to become landlords by default. Investors large and small now make up about 20% of all single-family home purchases across the country, the Associated Press recently reported. That's what is creating these unusual competition dynamics between households and institutional investors alike. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it Why this matters for renters (and investors) Accidental landlords can be a disruptive force precisely because they tend to have different priorities than professional investors. "Unlike institutional operators who use sophisticated rent optimization strategies, accidental landlords typically price units simply to cover costs," the Parcl report explains. "This dynamic creates downward pressure on rents exactly where institutional investors have concentrated their portfolios." In other words: Mom-and-pop owners are competing for tenants in the same neighborhoods as investors and corporate landlords, and in many cases, undercutting them. In the short-term, this means many renters may see cheaper rent and lower yearly rental price hikes. On the flip side for investors, this means profit margins in these geos may not see major upside in the short-term. This shift could further strain profitability for big players in the single-family rental space, especially since many of them have become net sellers over the past year. According to Parcl, 76.7% of institutional net selling happened in just the six metros above, with Atlanta and Dallas topping the list. With prices expected to remain flat or decline over the next year, institutional investors appear to be building up cash in anticipation of picking up some acquisition targets. As time passes, these accidental landlords could become highly incentivized to sell off to institutions or other mom-and-pop real-estate investors looking for a good deal. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Accredited investors can now buy into this $22 trillion asset class once reserved for elites – and become the landlord of Walmart, Whole Foods or Kroger without lifting a finger. Here's how Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
CNBC
23-07-2025
- Business
- CNBC
Institutional landlords see new competition from an unexpected source
It's getting harder to sell a home, as rising supply, high mortgage rates and waning consumer confidence conspire to keep potential buyers on the sidelines. Now some frustrated sellers are deciding to de-list their properties and instead offer them on the rental market. These new rentals are coming in direct competition with institutional investors in the rental space, especially in the markets where those investors are most prevalent. The largest investors, those with more than 50,000 homes in their portfolios, are highly concentrated geographically. Names like Invitation Homes, American Homes 4 Rent and Progress Residential each hold over a third of their assets in just six U.S. housing markets, according to an analysis by Parcl Labs: Atlanta, Phoenix, Dallas, Houston, Tampa, Florida, and Charlotte, North Carolina. These markets have seen inventory growth of well over 20% in the past year — much of it from former owner-occupants. "When these home sellers cannot find buyers, they face three choices: delist and wait, cut price to find market clearing level, or convert to rental. The last option creates what Parcl Labs terms 'accidental landlords': Owners who enter the single-family rental market not by design, but by necessity," wrote Jesus Leal Trujillo, principal data scientist at Parcl Labs. Garret Johnson bought his Dallas home two years ago, but recently got a new job in Houston. He thought selling his home last March would be easy. "There weren't many buyers, just lookers, and people were biding their time waiting for better rates. [There was] a lot of economic uncertainty in those months, March and April, that we had listed the house, so I think that played a factor as well," Johnson said. After a few months, Johnson decided to try putting his home up for rent. It wasn't his ideal plan, he said, but in just the first few days, he had several offers. The rent doesn't fully cover his mortgage, Johnson said, but he recast his loan and put more equity in the home to lower the payments. He also changed his homeowners insurance to a landlord policy for additional savings. Johnson said he doesn't expect to sell for several years. CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. "I've gotten to be creative, and hopefully the goal is, in the next few years, to start to turn a profit on the month-to-month basis of the rent versus mortgage," he said. The inventory of homes for sale has already been growing steadily over the past year, especially in the formerly hot pandemic migration markets like the Sun Belt. Homes are sitting on the market longer as sellers, used to the heady price hikes of the last five years, are reluctant to lower their prices. As more for-sale supply enters the rental pool, that could limit landlord pricing power. "You're not going to see big reductions in rent, but maybe you won't be able to get 4% or 5% increases on your rent. Maybe it's just 1% to 2% in some cases," said Haendel St. Juste, a senior equity research analyst at Mizuho Securities. "But the professional big guys, INVH, AMH, have been getting 4% to 5% renewal rates and 75% retention in their portfolio. So keeping people in the homes at 4% to 5% rent is a key part of their business model." This is not, however, the first time this has happened. "We saw something like this in 2022 after mortgage rates doubled: A huge uptick in the number of people who owned one property besides their primary residence," said Rick Sharga, CEO of CJ Patrick Co., a real estate advisory firm. The largest single-family rental REITs are now selling more homes than they're buying, according to a count by Parcl Labs. That does not, however, mean they're exiting the market. "They are deploying more funds into build-to-rent projects, rather than competing with smaller investors and traditional homebuyers for resale properties," said Sharga, suggesting that doing so limits the threat from those so-called accidental landlords. That minimizes some of the risk, but St. Juste said the biggest landlords will have to incur some occupancy decline in order to optimize their revenue, as opposed to just slashing rents. "The incremental risk from this slow selling season is that there could be more supply, you know, come this fall, come next spring, that could limit some of the rental growth upside for next year," he said.
Newsweek
14-07-2025
- Business
- Newsweek
Austin Housing Market Given Ominous Warning
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. The vertiginous fall of home prices in Austin, Texas, seems to have no end in sight, according to experts who believe that steep declines are likely to continue in the coming months. A recent analysis by real estate intelligence platform Parcl Labs estimates that the Texas capital will see the biggest downturn in home prices in the country over the next year—even as the cost of buying a home in the city has already fallen drastically from its COVID-19 pandemic peak. Austin's housing market, according to Parcl Labs, is currently in "bear territory"—which means, essentially, that property values have been dropping for a consistent period of time—with home prices now over 20 percent down from their peak. Despite this dip, researchers at the company said, "we still expect home prices to decline 16.5 percent from current levels over the next 12 months. This is the largest expected decline in our coverage universe of 40 real estate markets nationally." Behind Austin's Housing Market Downfall According to Redfin, the median sale price of a home in May—the latest month for which reliable monthly figures are available—was $557,500, down 5 percent from a year earlier. At their peak in May 2022, home sale prices in the city had reached a median of $667,000—which means that buying property in Austin was over $200,000 more expensive than it had been before the pandemic, when it was around $400,000. In the same month, home sales in the city were down by 12.1 percent year-over-year, at 861, and those homes that went under contract spent an average of 48 days on the market, six more than in May 2024. Active listings in the Austin-Round Rock metropolitan area totaled 12,525, up from 9,902 a year earlier. Inventory was actually higher than pre-pandemic level and the highest going as far as 2016, according to data from "It's important to understand why these adjustments are happening and what they represent for the health of the market," Emily Girard, chief executive officer (CEO) of Unlock MLS and the Austin Board of REALTORS (ABOR), told Newsweek. "What we're seeing in Austin is a necessary and overdue normalization after an unprecedented period of price acceleration during the pandemic. It is a return to sustainability." Home prices skyrocketed during the pandemic homebuying frenzy unleashed by historically low mortgage rates. "In 2021 during the pandemic, more homes were sold in the Austin-Round Rock MSA than ever before, and sales dollar volume yielded more than a $23 billion impact on the Austin-area economy," Girard said. "The pandemic led to increased demand as buyers in the market had more disposable income and reevaluated their needs in a living space after spending months at home." She added: "That, combined with record-low interest rates at the time and an Austin economy that continued to make major company relocation announcements regularly, led to more homes being sold and prices increasing to an unsustainable level." The price declines that the city has been experiencing for the past couple of years represent "healthy adjustments," Girard said as the market "normalizes." And prices, as experts say, are continuing to fall. According to Redfin data, Austin was one of the metros reporting the biggest year-over-year declines in median sale prices, at -4.2 percent, in the four weeks ending July 6. Photo-illustration by Newsweek/Getty/Canva Buyers on Top The Austin housing market downturn does not mean that the city has now become undesirable for buyers—quite the opposite. "For buyers, this is one of the most favorable environments we've seen in years," Girard said. "Buyers have time to shop, compare and negotiate—luxuries that weren't available during the pandemic boom. They're in the market with more intention and more options, especially with increased affordability for first-time and moderate-income homebuyers." Sellers might have a harder time accepting that they no longer have the upper hand, and they may be forced to compromise on prices—especially as price declines are expected to continue. "Prices will continue to drop this year. That's because the last half of the year we always have more inventory. And if you ever look at the seasonal bell curve in Austin's selling season, prices always come down in the last half of the year," Austin-based realtor Jeremy Knight told Newsweek. "Yet, there are a lot of buyers on the sidelines. If we do see rates come down in the last half of the year, you'll see more closed numbers and buyers frantic in the market." Unfortunately, a majority of experts expect mortgage rates to continue hovering between the 6 and 7 percent marks through this year and 2026.
NBC News
24-06-2025
- Business
- NBC News
Home price hikes are slowing more than expected
Rising supply and slowing demand in the housing market are finally causing prices to cool off, and the weakness is accelerating. Home prices nationally rose just 2.7% in April compared with the previous year, according to the S&P CoreLogic Case-Shiller Index released Tuesday. That is down from a 3.4% annual increase in March and is the smallest gain in nearly two years. The report is slightly backdated, as it is a three-month running average of prices ended in April. Other more current readings of the market, such as one from Parcl Labs, shows prices nationally are now flat compared with a year ago. S&P Case-Shiller found the deceleration in prices was taking hold across the 10- and 20-city composites its index measures. Both are now substantially below their recent peaks. In addition, much of the annual increase in the April reading occurred in just the past six months, meaning prices got a boost from the spring market rather than showing up throughout the year. 'What's particularly striking is how this cycle has reshuffled regional leadership—markets that were pandemic darlings are now lagging, while historically steady performers in the Midwest and Northeast are setting the pace. This rotation signals a maturing market that's increasingly driven by fundamentals rather than speculative fervor,' said Nicholas Godec, head of fixed income at S&P Dow Jones Indices, in a release. New York saw the biggest increase in prices, with a 7.9% annual gain, followed by Chicago at 6% and Detroit at 5.5%. This is a shift from the first years of the pandemic, when the Sun Belt was seeing huge demand and big price gains. Prices in those previously hot markets are now falling. Both Tampa, Florida, and Dallas turned negative, down 2.2% and 0.2%, respectively. San Francisco prices were basically flat, and both Phoenix and Miami eked out gains of just over 1%. Higher mortgage rates, which shot over 7% in April and have settled back just under that mark since then, are keeping potential monthly payments near generational highs and pricing out significant pools of buyers, especially first-timers. That share dropped to just 30% of May sales, according to the National Association of Realtors. First-time buyers historically make up 40% of the market. The supply of homes for sale is rising sharply, but is still below pre-pandemic levels. Just 6% of sellers are at risk of selling at a loss, according to a new report from Redfin. That is slightly higher than a year ago, but still historically low. While prices are certainly weakening, they are nowhere close to being at risk of the major declines last seen following the subprime mortgage crisis and the Great Recession over a decade ago. 'Housing supply remains severely constrained, with existing homeowners reluctant to surrender their sub-4% pandemic-era rates and new construction failing to meet demand. This supply-demand imbalance continues to provide a price floor, preventing the sharp corrections that some had feared,' said Godec.
CNBC
24-06-2025
- Business
- CNBC
Home price hikes are slowing more than expected
Rising supply and slowing demand in the housing market are finally causing prices to cool off, and the weakness is accelerating. Home prices nationally rose just 2.7% in April compared with the previous year, according to the S&P CoreLogic Case-Shiller Index released Tuesday. That is down from a 3.4% annual increase in March and is the smallest gain in nearly two years. The report is slightly back-dated, as it is a three-month running average of prices ending in April. Other more current readings of the market, such as one from Parcl Labs, shows prices nationally are now flat compared with a year ago. S&P Case-Shiller found the deceleration in prices was taking hold across the 10- and 20-city composites its index measures. Both are now substantially below their recent peaks. In addition, much of the annual increase in the April reading occurred in just the past six months, meaning prices got a boost from the spring market rather than showing up throughout the year. "What's particularly striking is how this cycle has reshuffled regional leadership—markets that were pandemic darlings are now lagging, while historically steady performers in the Midwest and Northeast are setting the pace. This rotation signals a maturing market that's increasingly driven by fundamentals rather than speculative fervor," said Nicholas Godec, head of fixed income at S&P Dow Jones Indices, in a release. New York saw the biggest increase in prices, with a 7.9% annual gain, followed by Chicago at 6% and Detroit at 5.5%. This is a shift from the first years of the pandemic, when the Sun Belt was seeing huge demand and big price gains. Prices in those previously hot markets are now falling. Both Tampa and Dallas turned negative, down 2.2% and 0.2% respectively. San Francisco prices were basically flat, and both Phoenix and Miami eked out gains of just over 1%. Higher mortgage rates, which shot over 7% in April and have settled back just under that mark since then, are keeping potential monthly payments near generational highs and pricing out significant pools of buyers, especially first-timers. That share dropped to just 30% of May sales, according to the National Association of Realtors. First-time buyers historically make up 40% of the market. The supply of homes for sale is rising sharply, but is still below pre-pandemic levels. Just 6% of sellers are at risk of selling at a loss, according to a new report from Redfin. That is slightly higher than a year ago, but still historically low. While prices are certainly weakening, they are nowhere close to being at risk of the major declines last seen following the subprime mortgage crisis and the Great Recession over a decade ago. "Housing supply remains severely constrained, with existing homeowners reluctant to surrender their sub-4% pandemic-era rates and new construction failing to meet demand. This supply-demand imbalance continues to provide a price floor, preventing the sharp corrections that some had feared," said Godec.
