Rapidly rising housing prices in San Diego County have temporarily pushed one company that buys and leases single-family homes out of the market.
Since entering the San Diego County market in December 2012, Invitation Homes has bought 244 single-family homes in the county.
Purchases came to a standstill in the fourth quarter of 2020 and the company is not likely to resume purchases in San Diego anytime soon because the region has become such a strong sellers’ market, said Kristi DesJarlais, a company senior vice president.
“We didn’t buy anything in Southern California at all in the fourth quarter. We actually sold homes in Southern California,” DesJarlais said. “It’s great market. It’s just hard to buy there right now.”
The homes it has in San Diego are all leased.
“We don’t have any homes available in San Diego, zero. We’re 100% occupied in San Diego,” DeJarlais said.
Competition for single-family homes has become fierce because of a record low inventory of single-family homes for sale.
The Greater San Diego Association of Realtors reported that in February 2021, the number of new listings was 21.7% below what they were in 2020.
The overall inventory of homes on the market in February was 60% below what it was a year ago, according to the association. That amounted to less than a one-month supply of homes, down from a two-month supply in February 2020.
“It’s hard to find homes for sale,” DesJarlais. “While we like our position in San Diego, it’s not an identified growth area for us.”
She said demand for single-family homes has increased partly as a result of the pandemic as people looked for roomier places to live.
Unlike private buyers, she said Invitation Homes isn’t interested in getting into a bidding war on a particularly home.
“We are not emotionally attached to our homes,” DesJarlais said. “We’ve got to have a return on investment.”
Zillow, an online real estate listing and sales platform, reported that the value of a typical home in San Diego appreciated $87,664 over the past year.
It’s now worth $702,923, a 14.2% increases year-over-year, according to Zillow. In one month alone, January to February, the average value of a typical home rose 1.5 %, Zillow reported.
The average monthly rent that Home Investors charges in San Diego is about $2,500, according to DeJarlais.
By comparison, the average monthly rent in late March for a two-bedroom apartment in San Diego was $2,400 and the average for a one-bedroom apartment was $1,800, according to Zumper, an apartment listing service.
Based in Phoenix, Invitation Homes owns about 8,000 homes in Southern California, including San Diego, DeJarlais said.
The company is in 16 markets across the U.S. and owns a total of about 81,000 homes nationally.
It is among several companies in the country that are in the same business of buying and leasing single-family homes, but DeJarlais said Home Investors is the largest.
Southern California has historically been a good market as have other Sunbelt sections of the country.
“It’s strong market. People want to live there,
“Generally, what people want are homes that are in the southern part of the U.S.,” DesJarlais said.
The typical home for her company is about 40 years-old, about 2,000 square feet with three bedrooms, two bathrooms with parking and easy access to transportation corridors.
Nationally, the average Invitation Homes renter is about 39-years-old with an annual household income of about $110,000 a year who rents the home for three years, DesJarlais said.