Grant Wickes

@jayparsons Thanks Jay. Appreciate your posts and particularly your analysis of the data!

Apartment leasing in Q1'25 was un-seasonally hot -- nearly everywhere across the country. CoStar reported 128k units absorbed -- 2nd best Q1 on record. RealPage reported 138k units absorbed -- best Q1 on record. What's going on? The instant-reflex analysis is to credit the lack of home sales. But that's an oversimplification. Couple reasons: a) Leasing activity has been much hotter for apartments than for single-family rentals -- the more direct trade-off to home purchase. b) While fewer move-outs to purchase obviously boosts retention, it doesn't explain the massive number of NET NEW apartment renters entering the market. Some thoughts on drivers: 1) If you build it, they will come -- and we're building a ton of apartments. New, higher-priced rentals are pulling up higher-income renters from moderately priced units (filtering), opening up availability at the lower price points. And... 2) No one talks about this enough, but wage growth has outpaced rent growth for 27+ months. Rent-to-income ratios have come down. (Even Census data shows median rent-to-income ratios in line with pre-COVID.) When wages grow faster than rents, it widens the demand funnel. Win/win. More broadly: There's obviously a lot of noise right now around tariffs and we don't know exactly how that'll impact the market. But for Q1, it continued a story of jobs/wages being better than headlines/sentiment suggest. 3) The share of young adults living with parents has continued to decline. And for much of that group, an apartment is the logical first step. The crazy thing now is apartment absorption is nearing 2021 levels. But the big difference between 2025 and 2021 is supply. We had little supply in 2021, so vacancy dropped and rents surged. We have a 50-year high in supply here in 2025 (though numbers drop off later this year), and that's keeping vacancy elevated and putting downward pressure on rents ... for now. Big question marks around Q2 given potential impact of tariff fights... We'll see how it plays out but just accounting for lease-up activity alone of new units, I think Q2 absorption should be OK barring a worst-case scenario.

The conventional thinking is wrong: Single-family rentals do NOT boom when home sales bust. Home sales are at 16-year lows, and yet SFR rent growth fell to a 6-year low due to slower leasing activity plus increased supply. Yes, the massive discount to rent versus buy keeps many people renting longer. But it does NOT create more renters. Record rent growth hit in 2021 when home sales were booming. Why? A rising tide boosts all ships. Strong home sales boost the entire economy, which boosts household formation and demand for all types of housing. When homes are selling, more people leave to buy. But those rental homes often get backfilled quicker and at higher rents. So if you're in the rental housing business, you should be cheering for a stronger for sale housing market.

Invitation Homes (large single-family rental REIT) had its earnings call last week. Lots of color on the SFR market. Takeaways: 1) Rents for new leases fell 2.2% in Q4. That appears to be INVH's first rent cut in 10 years, according to data compiled by @JBREC.

@jayparsons @WSJ That don’t provide the appropriate returns on the invested capital.

@jayparsons @WSJ In my micro view of SFH world in Plano TX, I find many small mom & pop investors are somewhat unsophisticated re returns/cap rates that the big investors are. This causes over supply for the short (< 30days) & mid-term space (> 30 days) and lower prices…

This was a good piece in the @WSJ that gets into why the bigger single-family rental investors aren't buying houses in today's market (and haven't been -- at any scale -- in years, actually). A few things this article tells us about SFR investors that most ppl don't know:

The single-family rental market is one of the most fragmented industries in the United States. Even the biggest players are rounding errors in terms of market share.

@AmericanAir Big shout out to Andrew today (Nov 20) for help and service at yyz admirals club. Traveling with my 91 yr old mom to DFW and such a great experience for her. Thank you!!!

@johnemoore3 @Dbacks Awesome for you!!

Headed to Phoenix Monday to help photograph the World Series for the @dbacks. Excited isn’t a strong enough word to describe how I’m feeling. A dream come true. Blown away by this once in a lifetime opportunity. 🧵

So fun to be back around the Dallas #consciouscapitalism crowd listening to @curtishite #consciouscapdallas

Multifamily or single-family rental? Which is better Here's a look at SFR rents from CoreLogic, and if this chart wasn't labeled "Single-Family Rent Index," you'd have no idea this was SFR and not apartments. The trends -- historical and current -- are that similar.

If you missed my interview with Tommy Mello yesterday, here is the video. He dropped so many great tips about how to run and market a home service business and how he got his garage door company to $200 million. youtube.com/live/6PpZx4YOP…

We've been making the point since late last year that the balance of power in the rental housing market has rapidly shifted to renters, and The Wall Street Journal said as much this week with the headline: "Renters Are About to Get the Upper Hand." Why?

Those who claim America is becoming a "renter nation" may be surprised to see the U.S. homeownership rate hit a 12-year high of 66% in Q1'23. Contrary to narratives, homeownership has been on steady climb for the last 7 years.

@DamonGochneaur @HaydenG08 Hahahah. Too funny! Does Hayden’s team move forward to next round

@gwickes @HaydenG08 Great to see you too Grant! And you only confirmed my wife’s suspicions that I know every one in Dallas youth soccer seemingly.

Nothing better than watching my son find success on the same fields I did 25 years ago. Huge weekend, played every minute of all 3 games, 0 goals against, bagged two of his teams 5 goals on the weekend, including todays game winner!

For other travels continue to plan on plane deplaning delays at @TorontoPearson ea This is second trip to YYZ in a month. Not getting any better except now it seems they will let connecting passengers off #pearsoncustoms #PearsonT3

And out door for pickup by younger sister. Total time from gate arrival to out at post 22 for pickup was 33 minutes.

Arrived at 440pm AA1111 today from DFw to YYZ T3. @TorontoPearson Gate agent announce @CanBorderGTA had instituted a customs metering systems, so no one let off plane. However those with wheelchair or connecting flight (the announced name) could get off. #torontopearsont3