December 22, 2023

3 min read

What markets have seen the largest price cuts by large SFR operators?

What markets have seen the largest price cuts by large SFR operators?

In the last 12 months, large SFR operators have been slashing prices to offload inventory across multiple markets. We ran the numbers on 13 thousand properties listed for sale to understand which markets have experienced the most significant price drops, and here's what we found:

  • The median home for sale by SFR operators across all markets saw a price cut of 2.5 percent.
  • The markets with the deepest price cuts were Pittsburgh, PA, and Milwaukee, WI, with price cuts of 10 and 11 percent.
  • Markets in the Midwest (St. Louis,MI Davenport, IA, Evansville,IN, Peonia, IL), upper state New York (Rochester, Syracuse, Buffalo) and the South (Birmingham, AL, Jackson, MI and Tallahassee, FL) had price discounts north of 5 percent.

Where are the price cuts concentrated?

At Parcl Labs, we have documented an increase in price-cutting activity by large Single-Family Rental (SFR) operators (100+ properties) in multiple markets across the nation. The price cuts were widespread, but there were substantial differences in the magnitude of these cuts. To better understand these nuances, we examined what happened with 13,000 properties listed for sale by major players in the SFR space. Here are our findings:

  • Price reductions are prevalent across multiple regions, with the largest decreases in prices occurring in Upper State New York (Rochester, Syracuse, Buffalo), the Midwest (Pittsburgh, PA, Milwaukee, WI, Peoria, IL, South Bend, IN), and selected cities in the South (Columbus, GA, Augusta, GA, Birmingham, AL, etc.).
  • Pittsburgh and Milwaukee saw the largest price cuts by large SFR operators at 11% and 10%, respectively. Despite these price cuts, these markets continue to have a positive investor purchase-to-sale ratio, indicating they remain desirable markets.
  • In SFR activity hotspots like St. Louis, MO, Houston, TX, and Atlanta, GA, the price reductions have been more modest, ranging from 1.8% to 2.3%.
  • The number of properties listed does not necessarily correlate with steeper cuts. In markets like Detroit, MI, and Birmingham, AL, SFR operators listed a large number of houses for sale (300+ and 200+, respectively); however, the median reduction was only -5.5% and -4.2%, respectively.
  • A handful of markets in California actually saw a price appreciation of 1.2% on average.

As regional divergences intensify and rentals start to come down it is more important than ever to have access to the best in class data. Want to know more, contact us.

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