Ever since the initial public offering for Blackstone’s Invitation Homes with Fannie Mae’s backing, opinions have been circulating regarding the Single-Family Rental market. One of particular interest is that of the National Association of Realtors.
To quote HousingWire, “NAR made its stance on investors clear on several occasions: Investors are creating more competition for first-time homebuyers, possibly even keeping them from homeownership.”
NAR President William Brown wrote a letter to Mel Watt, Director of the Federal Housing Finance Agency, making it clear he believes Fannie Mae’s involvement is only assisting large institutions to compete with homebuyers. He goes on his letter to state that, “investors drive up the price of rents and remove affordable inventory from the hands of American homeowners.”
However, Greg Rand, CEO and Founder of OwnAmerica, made it clear in his interview with HousingWire that he is thinks NAR forgot about a very important constituency in the housing market – tenants.
Home Renters are Important Too
Rand believes that in its efforts to champion homebuyers, the National Association of Realtors is drawing a line in the sand against investors, and their tenants.
Rand says, “If a first-time homebuyer loses a house to an investor, that means that a renter family is going to live in that house, and they deserve housing options in safe neighborhoods and good schools as much as first time buyers. I don’t think it’s right for NAR to draw a competitive line where investors and renters are on one side and homebuyers and NAR are on the other. I would say homebuyers are competing with renters, and that’s the way the market works.”
There are many people in the housing market who benefit from investors in the Single-Family Rental space, including existing owners who property values are supported by investor demand.
“The turnaround of the housing market in 2011 was driven by a 65% increase in investor activity in a year that owner occupant home buyer activity was down 15%,” said Rand. “Investors played the dominant role in healing the housing crisis.”
Rand believes that rather than drawing a line between homebuyers and investors, the NAR should be more attentive and inclusive to the needs of all homeowners, even the ones who are not owner occupants.
NAR Being Hypocritical
Rand points out the National Association of Realtors cheered as home prices reached unsustainable levels in 2006, and when the bubble burst, created distressed property training certifications to help its members capitalize on foreclosures and short sales.
“The moment those homeowners lost their home to the crisis, they became tenants and second class in the eyes of NAR,” states Rand.
Rand further makes the point that, according to NAR’s own statistics, more than 1,000,000 home sales every year are investor purchases. Those home sales generate an estimated $4 billion in fees to NAR’s dues paying members.
What Do You Think?
What do you think about NAR drawing a line in the sand between homeowners and investors? Leave us a note in the comments below!