Every successful business must adjust to countless factors outside its control. That was especially true in 2020. Like the rest of the world, the entire team at Invitation Homes adapted to the changing nature of the health and economic impact of COVID-19 . Early in the pandemic, we took several key actions: we adopted protocols to keep our associates and residents safe, we developed financial assistance programs to help residents facing economic hardships, and we paused acquisitions. Like other businesses, we were not entirely sure what to expect as a result of the changing nature of our daily lives and habits, but we very quickly realized that our product was in higher-than-ever demand due to people looking for more space.
We believe this is the wave of the future – people want a safe, flexible, worry-free lifestyle in a space they can call their own. Invitation Homes stands ready to deliver.
In 2020, we witnessed a reversal of the decades-long incremental migration from the suburbs to city centers. A third of our new residents listed “more space” as their primary motivation for moving, making it the top factor in a survey we conducted in the third quarter of 2020. That growing appetite for single-family homes coupled with the resilience of our existing residents drove our occupancy to increase to a record high of over 98 percent. Once we better understood the impact of the pandemic and had adjusted our operations to fit new needs, we turned our attention to the increased demand for single-family homes, ramping up acquisitions. We ended 2020 with our fourth quarter acquisition volume being our highest in 6 years. We are carrying that growth strategy into 2021, while continuing to deliver exceptional service and genuine care to our residents.
From the beginning, location has always been the critical ingredient when we look to purchase a new home. We consider migration patterns and household formations to determine where in the country to invest, and we tend to buy homes in competitive areas where people are moving. This often means the Sunbelt, or “The Smile,” those states stretching from the Carolinas down to Florida and across the Southeast and Southwest to California and up to Seattle. These markets are desirable because they continue to grow faster than the country as a whole, thanks to a population shift to affordable, less-dense markets with diverse economies.¹
In our markets, we are regularly updating and adding to our portfolio, buying high-quality homes with attractive amenities and desirable floorplans that meet the evolving needs of our residents. Our typical home has three bedrooms with two baths, an attached parking structure, and is, on average, about 1,850 square feet. Adhering to this standard ensures that our homes meet the lifestyle needs of our residents, positioning us well as housing trends change.
When it comes to buying houses, Invitation Homes is channel agnostic, relying on multiple avenues to build our portfolio and feed the demand for our product. We buy houses through multiple channels, including off the MLS, from iBuyers, in bulk from other investors, and through builder partnerships. What is common across all of these channels is that we leverage our local investment teams’ relationships and experience to secure the best homes for future residents.
We believe 2020 demonstrated the growing demand for our product and the overall durability of our business. We are helping Americans reshape the way they live, and our unique advantages will continue to power strategic growth as we look ahead to a future where we continue to offer high-quality homes and unparalleled resident service.
¹ Danielle Nguyen et al., “Burns Single-Family Rental Analysis and Forecast” (John Burns Real Estate Consulting, December 2, 2020), p. 12.