Interesting article from Bloomberg News yesterday about the state of the housing market. Blackstone Group, for those don’t know, has been heavily involved in purchasing bank owned and foreclosed homes, investing $1.5 billion this year.
“Prices are starting to move faster,” said Jonathan Gray, global head of real estate for Blackstone, which has invested about $1.5 billion this year in foreclosed homes. “That’s one of the risks that emerge as more people like us get into the space and as individual homeowner confidence grows. Frankly, buying a home today is pretty compelling.”
The opportunity for funds to buy homes at discounts could last less than two or three years, Gray said yesterday at the Bloomberg Commercial Real Estate Conference in New York as record-low mortgage rates and home prices down 40 percent from the peak entice individuals back into real estate. Atlanta, Phoenix, Las Vegas and other markets hit hard by the worst housing crisis since the Great Depression are rebounding as the economy improves and the supply of homes for sale shrinks.
Truth be told, that window opened here in Phoenix several months ago and, while it remains open, finding those discounted assets is a bit of a challenge. We sit at 11,028 detached homes for sale as of this morning, more than 50 percent higher than the 7,200 homes on the market at the start of the summer. Of those, a somewhat inconsequential 990 are bank-owned properties and another 900 and change are pre-foreclosures, short sales and the like.
Only about 1,000 of the more than 12,000 homes listed in some version of pending are bank owned; another 6,000 are short sales and preforeclosures, indicating there will be a supply of bank owned homes into the future if banks don’t capitulate and approve the short sale. So, from that standpoint, the window still remains for those inclined to take the plunge.
Combine the current prices, low interest rates and a strong rental market and these next two years ought to be interesting here.