Lennar offers to sell 5,000 homes to big landlords

Homebuilder says its part of overall marketing efforts

(istock)
(istock)

With the housing market in a downturn, Lennar Corp., one of the biggest homebuilders in the U.S., is offering to sell about 5,000 homes to rental landlords, Bloomberg reports.

Most of the homes are in the Southwest and Southeast, with landlords having the opportunity in some cases to buy entire subdivisions, the outlet reports.

A Lennar representative told the outlet that the effort was part of its standard marketing efforts.

Big landlords have entered the homebuilding market to meet the tightening demand for housing, CNBC reported in June. At that time, homes-built-for-rent represented about 5 percent of the homebuilding market, nearly double the historical average, the outlet reported.

But with the recent sharp market downturn due to soaring interest rates, Lennar and other builders have ramped up their efforts to sell single-family homes to landlords, Bloomberg said.

Jeff Cline, executive director of the single-family rental advisory division of SVN, told Bloomberg that builders have sought bids on about 40,000 homes in recent months.

Lennar’s average home sale price in the third quarter was close to $500,000, which translates to a $2.5 billion valuation on the 5,000 homes offered to big landlords, Bloomberg reported. However, the outlet noted that buyers usually seek steep discounts for buying in bulk, which would drive that valuation down significantly.

The company is scheduled to report its fourth-quarter numbers after the market closes on Wednesday.

— Ted Glanzer