The esteemed panel consisted of Kevin S. Dwyer, Senior Vice President, RMBS, Morningstar Credit Ratings, LLC; Bradley J. Hauger, Senior Vice President, Loan Servicing Director, PNC Real Estate/Midland Loan Services; J. Christopher Hoeffel, Chief Financial Officer, CoreVest American Finance and R. Christopher Jones, Director, Deutsche Bank.
Readers of Crunched Credit know that we are bullish on SFR: single-family rental is the largest class of rental stock in America, eclipsing the multi-family market. The number of single-family rental units grew 23% from 2006-2015, with most of that growth following the Great Recession. Since then, the institutional single-family rental business has blossomed into a viable, long-term business. And as institutional ownership has grown, SFR finance has grown apace.
You know, for a long time, we, and I think many other observers, thought that SFR was a trade created by the collapse of the residential housing market in 2007-2008. We thought when the opportunity to buy single family homes at ridiculously low prices, fix them up and rent them went away, the trade would go away. We were wrong and SFR is growing into a mature industry that is likely to continue to grow for many years. Right now, depending on who you ask, 12 or 13% of US housing stock is now single family home rentals. Of that, only a small percentage is in institutional hands. Note that in several G20 countries, a very large portion of the housing stock is in institutional hands. It seems there’s plenty of headroom for this industry to grow here at home.
Over 80 of our friends and colleagues enjoyed the seminar (not to mention the liquid refreshments). Among other things, the panel covered:
• How SFR differs from traditional commercial and residential asset classes
• The current state of the SFR market
• The evolution of the SFR market since the downturn
• The performance and future of the SFR securitization market
• The impact of risk retention on SFR securitizations
• The new role of the GSEs in SFR
• The impact of consolidation on the market
• The sustainability growth in the SFR market
• The potential impact of an economic downturn on SFR
There was a lively discussion among the panelists which really represents all aspects of the industry and you could see the enthusiasm these folks have for the continued growth of this business. Here at Dechert we continue to be excited about the SFR business and continue to play a meaningful role across many sectors of that marketplace.
For anyone who wasn’t able to attend, you can follow the link below to listen to an audio recording of the panel from CREFC: