Texas Homebuyers: Meet Your Other Competition
Having trouble buying a home in Texas right now? The real estate market is tense not only because of the stormy settlements of companies.
Some of the blame in this hot market can be traced back to investment groups, according to investors Ryan Decemberwho wrote about it the latest trend in the Wall Street Journal. The pandemic has lured more businesses from commercial property to residential property. With so many office towers currently vacant and with more and more people working from home, investment groups are rushing down and exhausting entire subdivisions to convert them into rental properties.
December pointed to a bidding war that had broken out in Conroe, 40 miles north of Houston, last December. It wasn’t about a house, it was a whole subdivision. The house builder DR Horton had built a group of 124 houses and instead of selling them individually, they offered everything.
“You thought, you know, investors are dying for rental homes,” December said. The winning bid? $ 32 million from online real estate investment platform Fundrise LLC, which manages more than $ 1 billion on behalf of approximately 150,000 people. Horton made far more than if they had sold the houses individually.
Texas is an especially hot market for these types of bulk purchases, December said.
“Texas markets are booming and investors love them,” he said. “There are a lot of people who move to Texas for economic or weather reasons, and investors go ahead and buy houses that they want to turn around and rent out.”
December said he saw this trend continue for the time being.
“A lot of the other options are really sticky right now. You know, do you want to invest in an office tower or mall now, or do you think it’s safer to own 10,000 single-family homes with families paying rent every month? And more and more investors are choosing single-family houses. “