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The U.S. real estate landscape is evolving, marked by a burgeoning trend: the construction of single-family homes exclusively for rental purposes. As the dream of homeownership drifts further from reach for many, with soaring home prices and a widening affordability gap, what implications does this trend hold for the housing market? Dive deep into the emerging world of built-to-rent single-family homes, exploring its rise, the potential reasons behind developers’ pivot to this model, and the broader consequences for American housing supply and affordability. Are we witnessing a fundamental shift in the traditional aspirations of homeownership? Join us as we unpack these questions and more, shedding light on the future of the U.S. housing market. #SingleFamilyRentals #HomeAffordability #RealEstateTrends
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[00:00:12] Hey there.
[00:00:13] I saw an article and I just, I don’t know what to make of it.
[00:00:21] Let’s just get right into it.
[00:00:24] This one here, it says, Greystar starts its first built to rent community in the Houston area. And I was like, what? Built to rent? Why would you do something like that? We’re already in a place where we have very little. Well, we’ve got what apparently is low supply of single family homes and now we’re building them to rent only. How is that going to affect the supply in general? And are these homes being counted as single family homes in the inventory and therefore saying that we’re getting more homes online when we’re really just getting more rentals? So anyway, I took a look at this and it says the GraySTAR has started construction on its first built to rent community in Greater Houston. The community will have 156 homes with three or four bedrooms. The detached single family homes and townhomes will have access to community amenities including sun terrace, planned lagoon and lazy river playgrounds, parks and tennis courts. And let me just say, we’re going to go over there and take a look at it. It looks pretty cool. Okay. And it is a wonder of the world type development. Okay.
[00:01:32] I say everything’s bigger in Texas. It’s like, wow, I can’t believe it. So it says while prices for the rentals have not been disclosed for sale, homes in Sunterra range from about 300,000 to 800,000. And what’s funny in my research earlier is the properties were supposed to come online. The houses were supposed to be between 200,000-500,000. But that was like when the plan was put together. And that just shows how the inflation has just eaten away at purchasing. Power of Homes says the average price of a single family rental in greater Houston was about $2,340 in August, marking the second highest rate on record as prices have been steadily increasing. According to the Houston Association of Realtors, the second highest rate on record, $2,340 a month for a single family home rental. It says Suntera is the third best selling master plan community nationwide. According to RCLCO Real Estate Consulting, the 2,300 acre community saw a 49% increase in sales year over year in 2023 with a total of 669. So they sold 669 homes in this development and that would seem like a lot. It says Graystar’s built for rent business is managed nationally through summerwell across 50 communities, comprising nearly 10,000 homes. This initiative focuses on boosting single family housing supply in high demand markets. And there’s where I think everyone is making a big error, okay? You’ll see, economists say that it’s a supply problem and we need to build more houses. And I have said I don’t know that that’s the case in the sense that these houses, there’s 10,000 homes that are built for rent currently just by this one company. I believe like 3% of the overall market is single family rentals. And I believe there’s another like it’s a ridiculous number of mom and pop designated places that own significantly more rental single family homes in the United States.
[00:03:43] It says nearly 2000 built to rent single family homes have been built in Houston the past five years, ranking it fourth in the nation. According to Rent Cafe, houston ranked third in the nation of an upcoming built to rent communities with roughly 2600 single family units under construction. So we’re talking massive amounts of units coming online that if you’re counting those as a single family residence and not as a rental unit, you’re going to skew the numbers.
[00:04:09] And so when people say we need to build more housing and that’s going to drop the price of houses in general, I’ve been very skeptical of that. And as an example, just look at St. Louis. Let’s look at some of the communities in St. Louis where there’s houses that are, say, over $250,000 average.
[00:04:29] Within those areas, it would be very hard to build more units. And if you did build more units, the prices would still be high because the land cost at this stage is expensive versus what it was in the 1950s. And if you go out, way out to say like Wentzville and really the line of development out west, yes, you can get a home out there, but that’s not going to increase the supply of homes in communities like in the metro area. That’s an hour and a half drive into St. Louis every day. I don’t know many people that want to do that. So let’s take a look at this suntera. Have you ever seen anything like this?
[00:05:07] It is just fascinating.
[00:05:11] When we talked about the numbers, it’s a 2300 acre master plan community.
[00:05:17] It calls for 7000 homes. So out of that, only 1000 of them maybe are going to be rentals. Even though even then it’s like you could have just done. But 7000 homes as well as a crystal lagoons, amenity lakes, parks, playgrounds, and an expansive amenity village with a clubhouse and pool overlooking lagoon.
[00:05:38] Shoot, I wanted you to see the amenities, but look at this. They’re literally building a lagoon with sand and water and it’s just breathtaking. So someday in my life I’m going to have to get down there. I’m not criticizing people for building to rent. All I’m saying is that there’s this real issue of how are we counting what’s being built? And if we want to lower well, if we want to lower the price of homes for sale, which I don’t know that many people do, because if you live in a house, do you really want the price to go down in your neighborhood? It’s okay if it’s somebody else’s neighborhood but yours?
[00:06:25] I just don’t see building enough homes to make this supply situation go away the way people think, just the way I’m looking at it.
[00:06:36] But anyway, what do you think? Do you think that by building these single family rentals, do you think that’s helping the housing supply?
[00:06:44] One of my bigger concerns has been the price for renting is so high, okay? The cost to rent is so high.
[00:06:54] Younger people aren’t able to save any more of their money to put forth for a down payment or to help make a better balance sheet to go buy a house
ever. They could just be permanent renters. And I just find that to be uncomfortable. The idea that you would live all your life and never have the option to financially to be able to buy a home and own just it’s not the way I want to see things. So with that, I think I’m going to head out.
[00:07:26] Sunterra thousand homes, single family rentals. Would you want to live I mean, that’s another issue. Would you even want to live in a community that’s like you own it and everyone else around you rents?
[00:07:42] We have a community in St. Louis that is highly rentals. I mean, more rentals than owners at this point in time. And I don’t know that it’s really a panacea.
[00:07:55] That’s what I got for you today.
[00:07:59] You tell me what you think in the comments. Am I right? Am I wrong? Do we want lots of single family rentals all throughout the United States and built for rent communities popping up everywhere? That’s a really nice house, but you can only rent, it seems. odd. Anyway, thanks for watching. Thanks for listening. I’ll catch you on the next one.
[00:00:13] I saw an article and I just, I don’t know what to make of it.
[00:00:21] Let’s just get right into it.
[00:00:24] This one here, it says, Greystar starts its first built to rent community in the Houston area. And I was like, what? Built to rent? Why would you do something like that? We’re already in a place where we have very little. Well, we’ve got what apparently is low supply of single family homes and now we’re building them to rent only. How is that going to affect the supply in general? And are these homes being counted as single family homes in the inventory and therefore saying that we’re getting more homes online when we’re really just getting more rentals? So anyway, I took a look at this and it says the GraySTAR has started construction on its first built to rent community in Greater Houston. The community will have 156 homes with three or four bedrooms. The detached single family homes and townhomes will have access to community amenities including sun terrace, planned lagoon and lazy river playgrounds, parks and tennis courts. And let me just say, we’re going to go over there and take a look at it. It looks pretty cool. Okay. And it is a wonder of the world type development. Okay.
[00:01:32] I say everything’s bigger in Texas. It’s like, wow, I can’t believe it. So it says while prices for the rentals have not been disclosed for sale, homes in Sunterra range from about 300,000 to 800,000. And what’s funny in my research earlier is the properties were supposed to come online. The houses were supposed to be between 200,000-500,000. But that was like when the plan was put together. And that just shows how the inflation has just eaten away at purchasing. Power of Homes says the average price of a single family rental in greater Houston was about $2,340 in August, marking the second highest rate on record as prices have been steadily increasing. According to the Houston Association of Realtors, the second highest rate on record, $2,340 a month for a single family home rental. It says Suntera is the third best selling master plan community nationwide. According to RCLCO Real Estate Consulting, the 2,300 acre community saw a 49% increase in sales year over year in 2023 with a total of 669. So they sold 669 homes in this development and that would seem like a lot. It says Graystar’s built for rent business is managed nationally through summerwell across 50 communities, comprising nearly 10,000 homes. This initiative focuses on boosting single family housing supply in high demand markets. And there’s where I think everyone is making a big error, okay? You’ll see, economists say that it’s a supply problem and we need to build more houses. And I have said I don’t know that that’s the case in the sense that these houses, there’s 10,000 homes that are built for rent currently just by this one company. I believe like 3% of the overall market is single family rentals. And I believe there’s another like it’s a ridiculous number of mom and pop designated places that own significantly more rental single family homes in the United States.
[00:03:43] It says nearly 2000 built to rent single family homes have been built in Houston the past five years, ranking it fourth in the nation. According to Rent Cafe, houston ranked third in the nation of an upcoming built to rent communities with roughly 2600 single family units under construction. So we’re talking massive amounts of units coming online that if you’re counting those as a single family residence and not as a rental unit, you’re going to skew the numbers.
[00:04:09] And so when people say we need to build more housing and that’s going to drop the price of houses in general, I’ve been very skeptical of that. And as an example, just look at St. Louis. Let’s look at some of the communities in St. Louis where there’s houses that are, say, over $250,000 average.
[00:04:29] Within those areas, it would be very hard to build more units. And if you did build more units, the prices would still be high because the land cost at this stage is expensive versus what it was in the 1950s. And if you go out, way out to say like Wentzville and really the line of development out west, yes, you can get a home out there, but that’s not going to increase the supply of homes in communities like in the metro area. That’s an hour and a half drive into St. Louis every day. I don’t know many people that want to do that. So let’s take a look at this suntera. Have you ever seen anything like this?
[00:05:07] It is just fascinating.
[00:05:11] When we talked about the numbers, it’s a 2300 acre master plan community.
[00:05:17] It calls for 7000 homes. So out of that, only 1000 of them maybe are going to be rentals. Even though even then it’s like you could have just done. But 7000 homes as well as a crystal lagoons, amenity lakes, parks, playgrounds, and an expansive amenity village with a clubhouse and pool overlooking lagoon.
[00:05:38] Shoot, I wanted you to see the amenities, but look at this. They’re literally building a lagoon with sand and water and it’s just breathtaking. So someday in my life I’m going to have to get down there. I’m not criticizing people for building to rent. All I’m saying is that there’s this real issue of how are we counting what’s being built? And if we want to lower well, if we want to lower the price of homes for sale, which I don’t know that many people do, because if you live in a house, do you really want the price to go down in your neighborhood? It’s okay if it’s somebody else’s neighborhood but yours?
[00:06:25] I just don’t see building enough homes to make this supply situation go away the way people think, just the way I’m looking at it.
[00:06:36] But anyway, what do you think? Do you think that by building these single family rentals, do you think that’s helping the housing supply?
[00:06:44] One of my bigger concerns has been the price for renting is so high, okay? The cost to rent is so high.
[00:06:54] Younger people aren’t able to save any more of their money to put forth for a down payment or to help make a better balance sheet to go buy a house
ever. They could just be permanent renters. And I just find that to be uncomfortable. The idea that you would live all your life and never have the option to financially to be able to buy a home and own just it’s not the way I want to see things. So with that, I think I’m going to head out.
[00:07:26] Sunterra thousand homes, single family rentals. Would you want to live I mean, that’s another issue. Would you even want to live in a community that’s like you own it and everyone else around you rents?
[00:07:42] We have a community in St. Louis that is highly rentals. I mean, more rentals than owners at this point in time. And I don’t know that it’s really a panacea.
[00:07:55] That’s what I got for you today.
[00:07:59] You tell me what you think in the comments. Am I right? Am I wrong? Do we want lots of single family rentals all throughout the United States and built for rent communities popping up everywhere? That’s a really nice house, but you can only rent, it seems. odd. Anyway, thanks for watching. Thanks for listening. I’ll catch you on the next one.