Corporate Home Investors on Local Housing Communities: The Unseen Impact
The housing market has always been a dynamic entity, but recent years have brought a profound shift, particularly in the single-family home sector. This change, led by the increasing involvement of large corporate home investors, raises questions about the future of local housing communities, especially in areas like North Carolina’s Triangle region. This blog explores the deepening impact of this trend and advocates for the intrinsic value of local property management groups.
The Growing Trend: Corporate Home Investors in the Triangle
Recent data paints a stark picture of the changing landscape in the Triangle region, encompassing Wake, Durham, and Johnston counties. In 2021, out-of-state investors purchased a staggering 5,364 homes, marking a 168 percent increase from 2019. This surge in corporate investment has been particularly pronounced in Wake County, where records indicate 18,000 single-occupant homes owned by absentee out-of-state owners, 8,400 of which were acquired since January 1, 2020.
A Local Perspective: The Experience of an Insider
A former leasing coordinator for a major corporate home investor in Willow Spring, offers a unique insight into this trend. Her experiences highlight a concerning pattern: large investors focusing on distressed homes, often outpricing potential local homeowners. Smith’s perspective is particularly poignant, considering her dual role as both an employee and a tenant of the investor, revealing the inherent challenges in corporate property management.
Local Property Management vs. Corporate Ownership
The critical difference between local property managers and large institutional investors lies in their approach and connection to the community. Local groups are often more attuned to the needs of their tenants and the nuances of the local market. In contrast, the corporate model, focused more on revenue maximization, can sometimes lead to impersonal tenant relationships and less attentive property maintenance.
Tenant Challenges under Corporate Management
The expanding footprint of corporate investors has not been without its challenges for tenants. Issues range from delayed maintenance to impersonal customer service, as evidenced by the experiences of tenants in the Triangle. This contrasts starkly with the more personalized approach of local property management companies, which are typically more responsive and invested in tenant satisfaction.
The Data Speaks: A Look at the Numbers
The numbers reveal a significant shift in the Triangle’s real estate dynamics. Durham County alone, there are 6,000 single-family homes owned by absentee out-of-state owners, with 2,400 acquired since early 2020. This trend is reflected across the Triangle, with varying percentages of out-of-state absentee ownership: Johnston County (8.8 percent), Durham County (7.4 percent), Orange County (6.6 percent), and Wake County (5 percent).
The median sales price in 2021 was $345,000, a figure that attracts major investors, particularly when market prices are low. These investors often target areas like Wake County, seeking distressed properties and outbidding local homebuyers.
The Role and Importance of Local Property Management
In contrast to the corporate approach, local property management companies offer a vital community-centric alternative. These companies can maintain closer ties to the neighborhoods they serve, contributing positively to the local economy and ensuring properties are responsibly managed. Their hands-on approach benefits tenants, who receive more personalized care and quicker responses to issues.
Conclusion: Choosing Community Over Corporations
The shift towards corporate home ownership in regions like the Triangle is a trend with far-reaching implications. It underscores the importance of supporting local property management groups that are integral to the fabric of our communities. These local entities not only offer a more personalized approach to property management but also play a crucial role in maintaining the health and diversity of our local housing markets. As the landscape of real estate continues to evolve, the value of local, community-focused property management becomes increasingly apparent.