Brandon Donnelly

Over the last few years, there's been growing concern around institutional buyers (namely "Wall Street") buying up too many single-family houses and then renting them out.

But as we spoke about last year, the number of homes owned in this way is actually quite small. The vast majority of homes are owner occupied. And the second largest share of owners is what you might call "small landlords." That is, people who own somewhere between 1-9 homes.

So if the specific concern is that people are out there buying houses and then renting them out, the more fruitful target would be these small landlords. But nobody seems too fussed by them, which leads me to believe that this is an instance of symbolic politics theory. In other words, it's the association with the big bad Wall Street that people don't like.

Whatever the reason, here's the data on the largest single-family house buyers in the US last year (2024) via SFR Analytics:

Here are the metro areas where they transacted:

And here's this same data in heat map form:

The largest buyer was Opendoor, which is a so-called iBuyer. We've spoken about this company a lot on this blog. They don't actually want to hold any of the homes they buy. Instead, they buy, renovate, and then resell as quickly as possible.

The second largest was New Western. They are a wholesaler or "double-close buyer." These buyers want to own for an even shorter period of time and sometimes never actually own the home; instead they just assign their contract. What they're trying to do is buy at a discount and then immediately turn around and sell for a profit.

Note: SFR Analytics believes that New Western's count might be meaningfully understated in the above data. The company uses lots of different LLCs and acquisition strategies and so it's hard to aggregate the data. Assigning a contract also doesn't show up in any county records, so it's kind of impossible to track these. It's just like assigning a pre-construction condominium agreement.

Even still, what this data suggests is that single-family rental funds aren't as dominant as some might think. The overall counts for all of the largest buyers also remain relatively small. Last year, over 4 million existing homes (including condominiums and co-ops) were bought and sold in the US. And this was a nearly 30-year low.

Cover photo by Michael Tuszynski on Unsplash

Few people in Toronto seem to be talking about the important role that this city has played and is playing when it comes to cryptocurrencies (specifically Ethereum). And if you believe, as I do, that Ethereum and other blockchain technologies have the ability to form the backbone for an entirely new kind of world, then this is kind of a big deal.

The Financial Times recently published this article about "Wall Street's crypto whisperer." It is about a guy named Joseph Lubin who is the founder of a crypto company called ConsenSys and previously the co-founder of Ethereum. Lubin is from Toronto.

If you read the article, you'll see that Lubin is a pretty bright guy (and now a billionaire with his crypto assets). Born in Toronto, he ended up going to Princeton to study computer science. He worked on Wall Street for a bit (hence the whisperer moniker), but also did a bunch of other interesting stuff, including moving to Jamaica with a girlfriend and working on music production.

In 2013, he was back in Toronto and went to a Bitcoin meetup in the city. The article says it was in a downtown warehouse (which makes it sound pretty cool and underground). And at this downtown warehouse meetup, he met a guy (actually a teenager) named Vitalik Buterin. Vitalik had just written a white paper on what would ultimately become Ethereum and he gave Lubin a copy. Lubin was so "blown away" when he read it that he decided to join the movement.

The two (and presumably others) would then go on to live together in shared houses in Toronto, Miami, and Zug (Switzerland), and work on this new smart contract technology. Today, Ethereum has a market cap of nearly $400 billion (as of September 12, 2021).

Even if you ignore for a second that we're talking about crypto technologies, this is still a fascinating city building story. It is fascinating because it shows the value of in-person urban interactions (again, the two allegedly connected at a meetup in a downtown warehouse). And it is fascinating because the Toronto braintrust has been instrumental in advancing a technology that could arguably end up powering not only the future of the internet but perhaps the world.

At the same time, it strikes me that we need to be much better at both celebrating and encouraging these kinds of new ideas locally. Are we out in the world telling this story to the best of our abilities? Have we properly positioned Toronto as one of the most important places for cryptocurrencies and innovation in general? Mayor Suarez of Miami has been a great promoter of his city in this regard.

"Innovation" isn't usually neat and tidy. It happens on the fringe and it is often not obvious at the outset. Imagine what an Ethereum pitch would have sounded like back in 2013. But this is how new ideas start. And Toronto has proven to be full of them.

Photo by Narciso Arellano on Unsplash

Brandon Donnelly

Brandon Donnelly

The 10 largest buyers of US single-family houses in 2024

The capital of Ethereum

And we’re back