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," says 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 they’re
continuing 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.
Hedge fund manager John Paulson is betting on big growth in home
building and focusing on buying up undeveloped land in areas like
California, Nevada, and Arizona, which were among the hardest hit in the
housing crisis. Reportedly, Paulson & Co. have accumulated enough
land in these states alone to build up to 25,000 homes.
Also showing investors interest in housing: Stocks reflecting the
housing market are soaring. Publicly traded homebuilder stocks like
PulteGroup, KB Home, and Lennar have been trading near 52-week highs.
Tri Pointe Homes, a single-family home builder in California and
Colorado, raised $232 million for an IPO last week—the first homebuilder
IPO since 2004.
Source: “Big Money Betting Big on Housing,” CNNMoney (Feb. 4, 2013)