Wall Street and the Phoenix Housing Market

A Phoenix Biz Journal article by Kristena Hansen yesterday sheds some light on a growing trend of institutional investment in single-family homes.

Hansen cites statistics that show institutions and landlords that own more than ten homes each were involved in 15 percent of June 2013 home sales in Arizona…approaching double the national average.

A single equity firm owns 4,400 single-family rental homes in the Valley.

This is frightening to me for four reasons:

  1. Renters are by definition less invested in the community, and generally less interested in the long-term quality of life.
  2. Out-of-state landlords–especially corporate landlords–look at such transaction as business deals, not investments in the economic sustainability of the community.
  3. Institutional investors are largely interested in quarterly or annual profits, and/or short-games from flipping their investments; which could hasten another housing bubble.
  4. Scottsdale Mayor Jim Lane and the City Council have approved tens of thousands of new apartment units in the past couple of years. Excessive supply (which is not in accordance with Scottsdale’s General Plan) will contribute not only to declining rents, but also to owner-occupied home values.

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1 Comment

  1. A friend who is interested in this issue offered yet another reason:

    “Owning one or more properties in a particular neighborhood gives the investor a political voice and say as to what goes on in that neighborhood, particularly if the investor is an abutter to a potential rezoning property.”

    Of course, neighborhood assemblage (buying a controlling interest in a neighborhood and forcing everyone else out for purposes of redevelopment) has happened before in Scottsdale. The still-vacant Solis property at Camelback and 75th Street is a prime example.

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