Wall Street investors are the new breed of single-family landlords

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Purchases of single-family rental properties by investors are on the rise in Sunbelt cities like Phoenix; Austin, Texas; Las Vegas; Tampa; and Charlotte, among others, according to research by John Burns Real Estate Consulting.

The increased buying activity is raising concerns that large institutional investors are disproportionately represented in these markets and “are driving up home prices to unsustainable levels,“ said John Burns, CEO of John Burns Real Estate Consulting.

His concerns are fueled by business headlines like this, from CNN: “Wall Street is buying up family homes. The rent checks are too juicy to ignore.”

Burns concedes he is still working with the data and, at this point, only has a working hypothesis. A problem with that data so far, Burns said, is that it is difficult to distinguish large institutional buyers from mom-and-pop landlords with a handful of properties, or even how many are single buyers simply purchasing a vacation home.

One trend, however, is clear. Since the beginning of this year, private-label securitizations backed by mortgages on single-family rental properties have risen sharply.