Notes on SFR REITs
Posted: October 06, 2013 by John McClelland
Just finished reading a transcript of a Silver Bay discussion at the JPM Securities Financial Services and Real Estate Conference.
Here is one interesting quote
"But again, the institutional ownership that you read about in the papers is still very small, perhaps a 100,000, maybe 150,000 homes have been purchased over the past three, four years, and that's just tiny in comparison to the overall markets. So, we see a great deal of growth opportunity and consolidation going forward."
The media has largely been hammering on the institutional buyer as a principal cause of the home price run-ups we have seen in a lot of areas. This is only partially the case. Similar in the markets we follow.
A second quote is also interesting. "The cost of housing is all interrelated. If ultimately the housing costs in those areas goes up 50%, mortgage rates go up, the cost of attending to the home goes up, all of that will contribute in a world in which supply/demand tightens into higher rents."
That is why we like this model better than a lot forms of real estate ownership. If the owner-user market gets punished by rates, that still leaves renters in the mix.