Real Estate boom of 2013

peilthetraveler

peilthetraveler

Blackrock has come to my city(sacramento) and has been buying up every home under $300k. There are literally only a few weeks of existing home inventory in the whole county. Somewhere between 1,000 to 1,500 homes in a county of 1.4 million. Funny how in 2004-2005 it was the general population that was buying up homes and hoping to capture appreciation on the backend. Now hedge funds and investment companies are doing the EXACT same thing.

I can already see mom & pop next year. "Hey look at BLK...its doubled in value in 6 months and pays a dividend. Lets put all our retirement money into their stock because they must know what they are doing"

I don't know if anyone else is seeing their market explode (especially in the last few weeks), but this is definitely 2005 all over again in my city. Planning my exit strategy already.
 
They can buy up all they want, but in the end the general population must be left holding the bag to sustain any booms/bubbles. There just ain't enough people out there with incomes to support a widespread real estate boom. Granted, there is a boom currently going on in DC, but most of the buyers are probably overpaid government employees, and how many more payrolls can the government fund?

Maybe a boom will occur locally, such as Sacramento and other state capitals, or where there is significant economic activity (such as Midland/Odessa, TX), but most Americans are really cash strapped working shitty jobs, and unless that changes, I don't see it happening.
 
Quote from peilthetraveler:

Blackrock has come to my city(sacramento) and has been buying up every home under $300k. There are literally only a few weeks of existing home inventory in the whole county. Somewhere between 1,000 to 1,500 homes in a county of 1.4 million. Funny how in 2004-2005 it was the general population that was buying up homes and hoping to capture appreciation on the backend. Now hedge funds and investment companies are doing the EXACT same thing.

I can already see mom & pop next year. "Hey look at BLK...its doubled in value in 6 months and pays a dividend. Lets put all our retirement money into their stock because they must know what they are doing"

I don't know if anyone else is seeing their market explode (especially in the last few weeks), but this is definitely 2005 all over again in my city. Planning my exit strategy already.
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I think the difference is... that at these prices... the homes pay for themselves when they are rented out.
 
I talked with some of these hedge funds and they say that their plan is to buy & hold for 5 years. My biggest worry though is that these guys might be trying to corner the rental market in specific cities. If they control the majority of the available homes for rent, they could easily push up rental prices forcing more working adults under one roof to afford rent. As the rents get higher, so do real estate prices when people see that it might be cheaper to buy an overpriced house than pay for overpriced rent.
 
This situation is weird. I'm just looking around because I'm curious but the Sacramento County Employees’ Retirement System is managed by blackrock. Also, in a black rock investment outlook they didn't list sacramento as a key location to invest in real estate. Sort of a puzzle.

There must be more to this than a buy and hold on houses. Maybe black rock is going to originate the mortgages to sell, somthing, I don't know.

I just don't understand how they are going to make any money buying a bunch of houses or put it this way, with their money and brains it seems there is an easier way.

page 19

https://www2.blackrock.com/webcore/...ue=PUB_IND&source=GLOBAL&contentId=1111166112

another link.

http://news.theregistrysf.com/sacramento-county-puts-blackrock-on-watch-list/
 
Sorry if it is too simple,but... couldn't they be speculating on FED action started with buying MBS? It's pushing prices up now,maybe Blackrock thinks or knows that FED will continue helping housing market so it will rise in the next 5 years.
 
Quote from nutmeg:

This situation is weird. I'm just looking around because I'm curious but the Sacramento County Employees’ Retirement System is managed by blackrock. Also, in a black rock investment outlook they didn't list sacramento as a key location to invest in real estate. Sort of a puzzle.

There must be more to this than a buy and hold on houses. Maybe black rock is going to originate the mortgages to sell, somthing, I don't know.

I just don't understand how they are going to make any money buying a bunch of houses or put it this way, with their money and brains it seems there is an easier way.

page 19

https://www2.blackrock.com/webcore/...ue=PUB_IND&source=GLOBAL&contentId=1111166112

another link.:

http://news.theregistrysf.com/sacramento-county-puts-blackrock-on-watch-list/ [/QUOT


To say that SCERS is managed by Blackrock is a little misleading. Blackrock is one of SCERS 60+ investment managers. They do run a couple of real estate portfolios for the county pension fund but only about 3% of the overall fund. Most likely they are buying up some rental units as part of a laid out investment strategy for one of their core or value added RE funds. Whether SCERS invests directly in that fund is uncertain but totally possible. Typically municipal pension funds like their real estate investment managers to try and invest in some local properties to show city elected board members that they are investing in the local community. With over $200 mil in committed funds, that can buy a lot of houses. This seems more plausible than Blackrock secretly trying to corner the housing market in an "economic hotbed" like Sacramento.
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Quote from peilthetraveler:

Blackrock has come to my city(sacramento) and has been buying up every home under $300k.
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Question. Are these home vacant or in foreclosure?
 
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