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April 20, 2014

Investors Still Buying Up Properties in Bulk

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Investors Still Buying Up Properties in Bulk

Large corporate investors are continuing to buy up thousands of single-family homes to turn them into rentals and money-making ventures. 

And institutional investors are expected to become an even bigger force in the housing market in the coming months. Silver Bay Realty Trust Corp. became the first entity to seek an IPO for its single-family home real estate trust, hoping to raise $287.5 million for its IPO. Colony Capital plan to invest $1.5 billion in the single-family rental market in the upcoming year, officials told USA Today. 

Fannie Mae is pressing forward with its bulk sales program, expecting to unload nearly 2,000 homes in bulk sales to investors to lighten its portfolio of foreclosed houses. 

“What remains to be seen is how the new ownership will affect neighborhoods, and how long investment firms will stick around if prices rebound,” USA Today reports. 

The National Association of REALTORS®, the California Association of REALTORS®, and other real estate groups have been outspoken critics about the bulk sales programs. CAR has argued that the Fannie Mae program is unneeded and that there is enough home buyer demand for the market to soak up these properties. CAR has also criticized the program for not releasing exact locations and sales prices of the properties purchased by the investors. 

"We need home buyers in the properties," Sharon Bowler, chairwoman of CAR’s distressed property task force, told USA Today. "When you put this amount of rentals in one community, your housing values are going to drop."

Source: “Investment Firms Look to Single-Family Rentals,” USA Today (Oct. 21, 2012)

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