Arizona “Sooners”

Arizona has also seen “Sooners”, somewhat similar to those of Oklahoma, except the Arizona version are after land with houses on them.

The Arizona Republic in a good many articles stretching from 2011 has reported the incredible guzzling of metro-area home properties by a hand-full of corporate investors:

This has been a very big, important part of the housing “recovery” in the metro-Phoenix area, as well as in a few other areas of the U.S.Short-Sale Sign photo

Five “deep-pocket” investors, billions deep, are each buying thousands of homes, sometimes one by one and sometimes in bunches from sellers such as Fannie Mae, to the point that “… 1 of every 5 Valley homes is owned by an investor”.  In five zip codes, 85008, 85027, 85296, 85338 and 83345, these investors own more than half of all rentals there. The corporations are:

  • Cerberus SFR Holdings   (named after the Greek mystical three-headed “Hound of Hades” dog)
  • Firstkey Homes … owned by Cerberus
  • Invitation Homes
  • Colony Homes
  • American Homes for Rent

Everyone of these investors is sitting on a great deal of equity. Many properties in each portfolio is worth three-times the price paid.

There are two bits of good news here:  all of these investors are continuing to acquire properties, albeit at a much lower rate; and none are “flipping” … yet.

Which leads to the bad news:  when/if even one of those investors “unloads” properties, as opposed to orderly sell, the effect on the local housing market will be depressing, if not significantly negative. Logically, none will do that for the obvious negative impact it would have on themselves.


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