https://www.nytimes.com/interactive/2023/09/16/realestate/home-sales-north-carolina-wall-street.html?smid=nytcore-ios-share&referringSource=articleShare
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What Happens When Wall Street Buys Most of the Homes on Your Block?
By Ronda Kaysen and Ella Koeze
Reporting from Charlotte, N.C., Ronda Kaysen spoke to 30 local residents, along with experts and researchers, and Ella Koeze analyzed more than 130,000 sales.
Photos by Logan Cyrus
Sept. 16, 2023
Home sales on one block in Bradfield Farms, 2021-2022
The only house not bought by an investor.
?
Houses bought by an investor, with cash.
?
This house is in Bradfield Farms, a 34-year-old leafy subdivision on the eastern edge of Charlotte, N.C.
A photo of a small gray house with white trim and black shutters. It has a grassy lawn and a sign that says “Home” on the front porch.
In December 2021, it sold for $320,000 in cash to a real estate investor.
A photo illustration in which “sold to investor” in bright orange lettering appears diagonally across the front of the same gray house.
Soon after, the modest, three-bedroom house was converted into a rental. It wasn’t alone.
An photo illustration of a portion of a street with rectangles representing houses on either side. In some places on the street, photos of houses appear with the words “sold to investor” across the front of them.
Roughly a third of the homes on the block sold in 2021 and 2022. All but one were bought in all-cash deals by investors, who now rent them out.
The same illustration expands to show a full block. Of 51 houses, 15 are highlighted with orange, indicating that they were bought by investors. One house is highlighted in green, indicating it is the only one bought by an individual.
Across the Bradfield Farms subdivision, 50 percent of the homes that sold in 2021 and 2022 were bought by large investors who paid in cash, as first-time buyers struggled to get a foothold.
Bradfield Farms, a community of about 1,000 houses on the outskirts of Charlotte, is no longer a place where a young, middle-income couple can easily buy a modest house for less than $200,000. Just a few years ago, it was.
Alvin Maisonet became the first person in his family to own a home — a two-story house with shade trees in the front yard in Bradfield Farms — on his 36th birthday.
For $148,500, Mr. Maisonet, a truck driver, now 44, and his wife, Patricia Maisonet, 43, a nurse, traded a frenzied life in Paterson, N.J., for generational wealth and tranquility. Joggers waved and said hello. The grassy backyard was bucolic; Ms. Maisonet envisioned a pool. “I felt like I was a princess in the middle of my castle,” she said.
Alvin Maisonet in a white shirt standing beside Patricia Maisonet in a blue shirt in front of a gray house with white trim.
Alvin and Patricia Maisonet bought their house in Bradfield Farms almost a decade ago. Today, newcomers are more likely to find a rental than a starter home.
Now, a newcomer is more likely to rent a house from a corporate landlord with a name like FirstKey Homes, Main Street Renewal, HomeRiver Group or Progress Residential.
Wall Street has come for the starter home.
First-time buyers, who overwhelmingly rely on mortgages, were often outmatched by cash buyers at the beginning of the coronavirus pandemic, when interest rates plummeted below 3 percent and home prices soared. Across the United States, more than a third of all sales in 2022 were in cash. Many of those houses went to families and individuals, but investors’ paying cash accounted for nearly 10 percent of home purchases that year, according to data from ATTOM, a property data analytics company. Investor activity was even higher in fast-growing Sun Belt cities like Charlotte, Atlanta and Phoenix.
Investors with cash went on a home-buying spree in several cities
Share of home sales bought with all cash by investors in metropolitan areas
Charlotte, N.C.17%
in 20225%10%15%’06’10’15’20
Atlanta21%’06’10’15’20
Memphis19%’06’10’15’20
Birmingham, Ala.18%’06’10’15’20
Orlando, Fla.17%’06’10’15’20
Jacksonville, Fla.17%’06’10’15’20
Tampa, Fla.15%’06’10’15’20
Phoenix15%’06’10’15’20
Las Vegas13%’06’10’15’20
Kansas City, Mo.13%’06’10’15’20
San Antonio11%’06’10’15’20
Nashville11%’06’10’15’20
Houston11%’06’10’15’20
Source: ATTOM Note: Cities shown are those in the top 50 most populous metropolitan areas where the share of homes bought by investors with all cash increased by at least five percentage points from 2020 to 2022.
Investors were largely uninterested in wealthier enclaves. Instead, they targeted middle-income neighborhoods, many with larger Black and Latino populations. Bradfield Farms fit the bill: It is in an area that, in 2020, was 35 percent Black and 11 percent Latino, according to census data. Residents include teachers, auto shop workers, receptionists, nurses and cabinetmakers.
Over two years, from 2021 to 2022, investors snapped up properties in Bradfield Farms at roughly three times the rate of the citywide average of 17 percent, according to a New York Times analysis of ATTOM’s data.
Homeowners were inundated with calls, text messages, letters and emails from people offering to buy their homes sight unseen. The buyers closed fast and used inscrutable names that ended in LLC. “Investors went hog-wild,” said Kelli Enos, a local real estate agent.
All-cash home sales in Charlotte, 2021-2022
85
485
77
485
85
Bradfield
Farms
85
Charlotte
74
CHARLOTTE
AIRPORT
27
27
485
485
74
NORTH CAROLINA
SOUTH CAROLINA
485
N
1 MILE
All-cash home sales in Charlotte, 2021-2022
85
485
77
485
85
Bradfield
Farms
85
Charlotte
74
CHARLOTTE
AIRPORT
27
485
485
74
NORTH CAROLINA
SOUTH CAROLINA
485
N
1 MILE
Large investors concentrated their purchases in middle- and working-class neighborhoods around the northern and eastern sides of the city.
A map of Charlotte and its surrounding areas. Orange dots show where large investor buyers purchased homes in all cash sales. Bradfield Farms is highlighted on the map’s eastern side.
In wealthier neighborhoods in south Charlotte, cash buyers were largely individuals, not corporations.
Blue dots have been added to the map to show where individuals purchased homes with cash.
Source: ATTOM
Cash offers from investors are appealing. A homeowner does not have to stage the house, wait for an appraisal and inspection or watch a sale fall apart if the buyer can’t get a mortgage.
Even as investors have dialed back their purchases, buyers remain under pressure. Mortgage rates are at a 21-year high, home prices have continued to rise in Charlotte, and inventory is anemic. “Wall Street is definitely being blamed for home price increases and rent increases, whereas, in reality, home prices and rents would have gone up because these are fast-growing areas,” said Laurie Goodman, the founder of the Housing Finance Policy Center at the Urban Institute.
The single-family rental industry sees its efforts as providing a vital social benefit: People need homes to rent, and Wall Street has the deep pockets to help.
“Covid really drove demand for single-family rentals,” said David Howard, the chief executive of the National Rental Home Council. “As more people worked from home and schooled their kids from home, they needed more space. They wanted the front yard. They wanted a neighborhood with sidewalks and a little community center.”
A person sitting at a table on the deck of a swimming pool while a small child stands nearby holding a doll.
Bradfield Farms has two community pools, a clubhouse, tennis courts and access to walking and biking trails.
A rental lowers the barrier of entry into a neighborhood. If you can’t afford a down payment, or don’t have strong enough credit for a mortgage, a “For Rent” sign changes the equation. More Black households move into white neighborhoods when the share of rentals grows, increasing diversity, a 2021 study found. “Rentals offer an opportunity to move into these better neighborhoods,” said Keith R. Ihlanfeldt, an economics professor at Florida State University and an author of the study.
But advocates of affordable housing argue that the proliferation of single-family rentals traps would-be buyers.
“It’s a thing of scale — they’re reaching near monopoly in some places,” said Madeline Bankson, a housing research coordinator at the nonprofit Private Equity Stakeholder Project. “They’re shutting people out of the home-buying process.”
For most Americans, their home is their largest investment and their primary source of generational wealth. Yet only 46 percent of Black households and 49 percent of Latino households own a home, both well below the national average of 66 percent.
“They say they can rent you the American dream, but I know hundreds of people who don’t want to rent — they want to own,” said Jessica Moreno, a community organizer at Action NC, a tenant organization in Charlotte.
Tarchia Barber standing next to a tree and in front of a house with a lawn.
Tarchia Barber chose to rent in Bradfield Farms because of the neighborhood’s rural feel. While her neighbors have given her a warm welcome, her landlord has raised the rent.
The Renters
Tarchia Barber liked the rural feel of Bradfield Farms, with cul-de-sacs and shady streets surrounded by farmland and woods. “I’m a country girl,” she said, standing on her lawn one steamy afternoon, a “Home Sweet Home” sign on her walkway and bags of fresh mulch in the flower beds. When Ms. Barber moved into the house in December 2021, her neighbors left cookies, cards and flowers on her doorstep. When a neighbor cleaned her gutters unprompted, she thanked him with a cheesecake.
But her landlord, Progress Residential, has been slow to make repairs, Ms. Barber said. “My last landlord addressed problems within 24 hours,” she said. “He didn't go through a property management company. He’d come and look at it in the day.”
By contrast, she has waited five or six days for a Progress technician to arrive after submitting work orders for repairs to a blocked dryer vent and a leaking shower. Nikki Sloup, a Progress Residential spokeswoman, said in an email that the company “responded to and completed all work orders,” sending out multiple technicians.
A yellow school bus at a stop sign with its door open and a person in a blue sweatshirt with a red backpack walking beside it.
A school bus drops off students in Bradfield Farms, a quiet neighborhood where parents say their children often roam freely.
When Ms. Barber renewed her lease last year, Progress increased her rent by 11 percent, to $1,876 a month, an amount Ms. Sloup described as “below market rates.”
What would have happened if a person, instead of a corporation, had bought the three-bedroom house for $300,000 in 2021? With a modest 3.5 percent down payment on a 30-year loan, the homeowner would now be paying roughly $1,200 a month in interest and principal, given the mortgage rates at that time. While homeowners are responsible for utilities, property taxes, repairs and association fees, they also build equity over time.
Becky Johnson holding a clipboard with a handwritten sign that reads “BFF Rental Cap Vote. Not Selling Anything!!!” and another sign that reads “Vote BFF.”
Becky Johnson carried handmade signs as she canvassed her neighborhood, persuading homeowners to cap the number of rentals.
The Homeowners
A decade ago, Becky Johnson, 71, didn’t know of any rentals on her street. Now, 41 percent of the homes there are corporate-owned, single-family rentals. Ms. Johnson, a retired computer security worker whose olive green house has an American flag flying on the garage door and a “Thank You, Jesus” sign on the walkway, went door to door in the North Carolina heat in the summer of 2022, urging her neighbors to vote to cap the number of rentals at 25 percent of the homes in the community, and to require homeowners to live in their home for a year before renting it.
The homeowners association needs a two-thirds supermajority to amend its bylaws. Once investors own more than a third of the homes, reaching the voting threshold could prove impossible. Lenders are often hesitant to underwrite mortgages in communities with a large share of investor-owned properties, potentially making it harder to sell. They worry that a neighborhood “could enter a self-reinforcing downward spiral if all the investors head for the exit at the same time or default en masse,” said Greg McBride, the chief financial analyst for Bankrate.com.
Sheree Hall in a pink shirt walking beside Becky Johnson in a blue shirt near a driveway.
Sheree Hall, foreground, and Ms. Johnson both own homes in Bradfield Farms. Ms. Hall, whose grown daughter and son-in-law moved in with her because of rising housing costs, worries about a “corporate takeover” of her neighborhood.
Sheree Hall, 52, a homemaker, canvassed the neighborhood with Ms. Johnson. “We weren’t going to sit back and let the corporate takeover of our neighborhood happen,” she said. “We had to stop it.”
A few homeowners, including the Maisonets from New Jersey, balked at the proposal. “It’s horrible. You should be able to rent your home to whoever you want,” said Mr. Maisonet, who felt pressured by the door-knocking campaign. “It smelled fishy.”
In April, the amendment passed.
A white dog looks out from behind a storm door.
A dog at home in Bradfield Farms.
Too Big to Roll Back
Large, national single-family rental companies were born of the 2008 foreclosure crisis, plucking up distressed properties in the nation’s hardest-hit communities. During the pandemic-era housing market, these companies saw their profits soar as rents increased by double-digit percentages and home prices rose at their fastest clip in U.S. history. In Bradfield Farms, the average home price jumped 48 percent, to $374,165, from January 2021 to January 2023, according to Brandon Little, a real estate broker with Keller Williams.
A red sign with the words “Welcome: Bradfield Farms” on it on a berm surrounded by large trees and shrubs.
Bradfield Farms, a 34-year-old community of about 1,000 homes on the edge of Charlotte, N.C., has been rattled by a spike in investor home purchases.
Nationwide, institutional investors own 3.8 percent of the country’s 15.1 million single-family rentals, but in Charlotte, they own 20 percent, according to an April report by the Urban Institute.
Their presence has professionalized a mom-and-pop sector. “We’ve had the emergence of an industry,” said Jade Rahmani, a real estate finance analyst at Keefe, Bruyette & Woods. “It’s become more institutionalized.”
Wall Street investors turned the single-family rental home into a powerful investment tool by bundling multiple purchases into portfolios available for investment. Among the investors are pension funds and mutual funds, which “see it as a good bet,” Mr. Rahmani said.
“They want exposure to the U.S. housing market. They think these homes are going to be worth more in the future,” he added. “And they like the income.”
When Ms. Enos, 62, the real estate agent, sold her Bradfield Farms home two years ago, she was adamant that she would not sell to an investor.
For years, her brother lived on the same block. Their children and dogs meandered among the houses. As she watched clients jump at anonymous cash offers, she worried that the neighborhood would become transitory. Who would organize the block party if no one lived on the block for long? She sold her house to a neighbor, not an investor.
Yet, she owns stock in Invitation Homes, the country’s largest owner of single-family rentals. “I would be silly if I didn’t,” she said. “I make really good money from it.”
James M. Hasty Jr. in a blue shirt with his arm around Dana Hartness in a black shirt, standing in a yard in front of a trampoline where two children and a dog are playing.
Dana Hartness and James M. Hasty Jr. in the backyard of their rental home, where they live with their combined eight children.
Homeowner vs. Renter
Ms. Johnson pointed out homes that, to her, did not meet the neighborhood’s standards. One, painted a bright blue, seemed garish. A beige one felt dull. She suspected the ones with overgrown grass or dirty siding were rentals. “We love our neighborhood and want it to stay the same way it was,” she said.
On a neighborhood Facebook group, renters are blamed for trash and furniture left on the curb, loud music and domestic disputes. Members fret that home values might fall.
Lisa Damas, 58, installed cameras around her property, and Kasey and Jim Sylvester sold their house last year to a couple in part because the neighborhood felt as if it had deteriorated. “The whole vibe was switching,” said Ms. Sylvester, 38, a stay-at-home mother. “There were groups of teenagers giving me attitude.”
Two of the Hartness children playing on a trampoline with the family dog.
Ms. Hartness was dismayed when her landlord removed the privacy fence that came with the rental property.
However, reports of crimes — burglaries, thefts, assaults, weapons violations, vandalism and drugs — dropped to 31 in 2022, from 40 in 2020, according to the Charlotte-Mecklenburg Police Department.
Ms. Maisonet does not understand the animosity toward renters, whom she sees as good neighbors — she’s watched their children grow, just as she did the owners’. “I don’t know if it’s prejudice,” said Ms. Maisonet, who is originally from Peru. “I think it’s just fear. Most likely they’re acting out of fear that something can go wrong.”
Some renters say they feel attacked from all sides: Landlords raise rents and slow-walk repairs; homeowners blame them for neighborhood ills.
Dana Hartness, 44, who works in corporate travel, once owned a home here. Now she rents a three-bedroom house blocks from the one where her former husband still lives. She chose it partly because of its fenced-in yard — an amenity corporate landlords tout as a reason to rent a single-family home.
She and her husband, James M. Hasty Jr., 48, a cabinetmaker, put a trampoline in their yard, where their combined eight children play. But last spring, their landlord, Progress Residential, took down the fence because its style did not fully comply with homeowners association rules. Rather than replace it with one that the community allowed, they cut Ms. Hartness a $1,200 check, nowhere near enough to cover the cost of a new fence. “It felt like a tropical oasis,” she said. Set on a corner lot, the yard now feels exposed. “Now we’re depressed.”
A sign that says “For Rent” on a lawn.
From 2021 to 2022, large investors bought half of the homes that sold in Bradfield Farms, significantly increasing the number of single-family rentals in the community.
There have been other problems, too. Progress didn’t replace a broken refrigerator for over a week, and when the air-conditioner broke, the family suffered through a weekend-long heat wave, Ms. Hartness said. (Ms. Sloup of Progress Residential said in an email that the air-conditioner had been repaired promptly.)
Yet, Ms. Hartness is grateful that the school bus drops off her four children out front, and they can roam the neighborhood unsupervised, with hiking and biking trails nearby.
She’s disappointed by homeowners who she thinks “want to push people to buy when it’s not as feasible as it once was.”
“It is really difficult for people in my age bracket to buy a house right now,” she said. “But we also would like a family-type community.”
Methodology
Home sales data come from ATTOM, a property data analytics company that collects and consolidates property data from across the country. Home sales include single-family houses, condos and townhouses. Investors are any buyers that are companies, LLCs, corporations and other entities. They do not include personal trusts; however, LLCs used to purchase houses on behalf of individuals would appear as investors in the data.
All city-level statistics are based on metropolitan statistical areas (MSA), and are geographically larger than a city’s official limits.
Within the Charlotte MSA, large investors are defined as investors who made at least 11 purchases in that area in 2021 and 2022.
Aerial imagery of Bradfield Farms is from the National Agriculture Imagery Program via the U.S. Geological Survey’s EarthExplorer. The image was taken in July 2020.
Bradfield Farms’ borders are from the Bradfield Farms Homeowners Association’s governing documents.
Other map data comes from the U.S. Census Bureau and Mecklenburg County.
Bradfield Farms demographic data is from the 2020 decennial census for the census block group that contains the neighborhood.
Photographs of houses in Bradfield Farms were taken by Logan Cyrus in May 2023.
Additional research by Susan Beachy.
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