Big investor groups take huge bite out of housing market

Washington state realtors report that large investor groups were the most active participants in recent foreclosure sales in Pierce and Thurston counties, mirroring the national picture.

Hedge funds and private equity firms are looking to cash in on real estate, “rushing in to buy up companies and assets in every part of the housing supply chain, including undeveloped land, homebuilders, foreclosed homes, and building parts manufacturers,” according to a recent CNNMoney article.

“A lot of investors see a short window of opportunity where there’s good inventory on the market at bottom market prices,” said Brad Geisen, CEO of Foreclosure.com. “No one knows how long it will last, so these investors are trying to buy as much as they can right now.”

Last year, the Blackstone Group spent $2.7 billion buying up 17,000 single-family homes in foreclosure to turn into rentals, and the company continues to snatch up thousands more homes per month.

Pine River Capital Management’s Silver Bay Realty Trust went public in December and, so far, has purchased more than 2,500 homes in once hard-hit housing markets to turn into rentals. It plans to buy 3,100 more homes, according to its recent SEC filing.