Blackstone Group has purchased $2.5 billion in foreclosed homes and short sales and is looking for more. 16,000 private homes already, which are being minimally rehabbed and returned to the market as rentals. This is going on in those areas hardest hit by the crash: Florida, California, Georgia and Arizona, for example, where prices have already rebounded 12%-22% and are expected to ultimately provide a cash appreciation; for now, Blackstone’s running it for the rental income.
The areas it’s buying and where prices have stabilized and are now rising again are all “non-judicial foreclosure” states, meaning foreclosures are completed in months, not the 3-4 years we’re seeing around here. Their market has cleared; ours has not. There’s a lesson to be learned there but it’s one that, naturally, has been missed by California legislators, who are busy changing their laws to protect deadbeat borrowers and permit them to enjoy the same leisurely process of rent-free living that their cousins in the east have. Funny how that works.