For years, corporations, hedge funds, and other large investment groups have been buying up homes across Las Vegas and converting them into rental properties.
This trend has frustrated many prospective homebuyers, who find that listings are quickly snapped up and taken off the for-sale market—often permanently. The result has been a tighter housing supply and sustained record-high home values.
As of now, the median price of a home in Nevada is approximately $485,000.
In a recent Las Vegas Review-Journal article, reporter Patrick Blennerhassett, found that New York-based hedge fund, Pretium Partners, manages the homes-for-rent management company, Progress Residential. Progress Residential manages at least 3,190 properties in Clark County.
Pretium Partners declined to provide Blennerhassett with an exact number of homes it owns but confirmed the total is fewer than 4,500.
Tracking the owners of properties can be challenging, as Blennerhassett said he spent “six months just finding the numbers for Progress Residential.”
“These [hedge funds] use dozens, potentially even hundreds of LLCs — companies with different names. If you were to try to find every home owned by Starwood Capital Group, for example, you can’t just put in “Starwood.”
Blennerhassett added that the government could step in to increase transparency in property records.
“As much as we have really good research from [UNLV’s Lied Center for Real Estate] who are looking into this, we really need the Secretary of State and the Clark County assessor's office to start working together to track this.”
Institutional investors are often quiet to the press on their practices, but they have said bulk purchasing of homes to rent could have some benefits.
“Premium Partners did respond to me and said they're helping people get cheaper rental homes,” Blennerhassett said.
“That they’re keeping these properties up to date, renovating them, and that they're offering people a cheaper place to live.”
At the same time, their actions could be making it harder for people to buy homes in the future.
“In the next decade, they could own 40 percent of all of the houses in the country. One thing that I'm seeing is they're not really into offloading them. They'll swap them between other institutional investors and not decrease their share of the housing market.”
Blennerhasset continued, “at some point, they will own enough homes in the country that rents could essentially be set by algorithms and Wall Street.”
Guest: Patrick Blennerhassett, real estate and housing reporter, Las Vegas Review-Journal
