Unison Releases 2021 Asset Performance Report

SAN FRANCISCO, June 29, 2021 /PRNewswire/ -- Today, home co-investing company Unison released its 2021 Asset Performance Report, which provides performance analysis of the company's assets over the past decade as well as insight into the scope and scale of asset opportunities and growth in the home co-investing category. The Asset Performance Report can be found here.

Since inception, Unison has provided institutional access to asset exposure in owner-occupied real estate through Unison home equity agreements. This is an asset class that has previously been unavailable to institutions. Single family residential real estate is the largest asset class in the market but is missing in almost all institutional portfolios. Unison offers this asset which strives to have equity-like returns without excessive risk and very little correlation to existing assets typically found in institutional portfolios.

Data in the 2021 Asset Performance Report affirms that owner-occupied residential real estate is a high performing, diversifying asset class which represents one of the largest components of wealth in the United States. The total value of all homes by the end of 2020 topped $33tn, accounting for 22% of all U.S. household assets.  Yet, the vast majority of this value is held by individual homeowners, who have taken massive amounts of leverage consisting mainly of mortgage debt. Unison believes that investors can benefit immensely from the diversified exposure and strong risk-adjusted returns of owner-occupied residential real estate assets.

A profitable pathway toward portfolio diversification
The new report highlights that since inception, Unison has invested in over 7,800 U.S. homes spanning 200 metropolitan areas across 30 states. Unison-originated assets have appreciated in value by an average of 16.5% annually,  outperforming other major asset classes and indices including S&P 500, REITs and fixed income. Strong asset performance paired with continued origination has resulted in significant growth of Unison's total asset value, increasing five-fold over the past three years. In the first quarter of 2021, Unison's total asset value has grown to $1.03bn up from a value of $165mm in Q1 2018.

"At Unison, a key focus of ours is to expose institutional investors to one of the largest components of wealth in the United States - owner-occupied residential real estate," said Brodie Gay, VP of Research at Unison. "Not only does this asset class provide institutional investors a way to diversify their assets, it also gives homeowners nationwide ways to tap into their home equity for important and often very critical needs."

Unison strives to provide the scale and critical risk oversight necessary for institutional clients and their end investors by tracking inflation and serving as a true inflation hedge without giving up the returns associated with risk assets. It also offers a new and useful way for homeowners to access equity in their homes without the burden of debt.

"Looking ahead, we're confident that investment exposure to owner-occupied residential real estate assets will be an essential part of all institutional investors' portfolios and our strong historical performance makes us the ideal partner to achieve this," said Thomas Sponholtz, founder and CEO of Unison.

Factors impacting Unison's strong 2021 asset performance
The findings indicate that the strong performance of Unison-originated assets is achieved thanks to the recent bull market in residential real estate along with Unison's systematic approach and strict origination guidelines that allow the company to provide efficient, diversified and scalable exposure to the asset class. Unison applies a proprietary selection model to select homes with the highest expected home price appreciation without excessive risk.  Strict origination guidelines seeks to ensure that Unison approves homeowners with strong credit and cash flow profiles and sufficient home equity. The high quality  of Unison-originated assets, the secular imbalance of strong demand and limited supply for homes, and the high cost of raw materials for new construction, among other factors, have contributed to the strong performance. With incredibly strong demand for homes and housing supply at 44% below the historical average, buyers are paying a premium of about 1.5% on the listing price, which is a strong signal that growth of supply is not meeting demand. And, new residential construction per 1mm people in the U.S. has been steadily decreasing, resulting in homeowners investing in their current home and building up equity as a preferable alternative to relocation.

According to Matt O'Hara, Head of Portfolio Management & Research at Unison, "The recent price appreciation of single family housing is clearly tied to the demand for space that has come as a result of the recent pandemic, which has exposed a shortage of homes across many markets in the U.S. and the shortage of construction workers and raw materials is compounding this effect."

"Growth in housing units cannot keep pace with the growing population and as cities and towns try to build to catch up with this demand," said O'Hara. "In my view, the pace of home price appreciation will continue for the foreseeable future."

About Unison
Unison is a San Francisco-based company that is pioneering a smarter, better way to own your home. Until now, the only way to finance a home was by taking on debt. Through home co-investments, we help homeowners access their equity flexibly with no monthly payments or interest. We aim to enhance home affordability, reduce debt, and deliver a less risky way for homeowners, investors, and society to think about their most important asset - the home. For additional information, visit www.unison.com or follow us on Facebook, Instagram, LinkedIn, Twitter and YouTube.

SOURCE Unison Homeownership Investors

Related Links

https://www.unison.com

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