Investors Betting on Market Recovery

real estate market homesVarious investors, notably hedge funds and private equity firms are racing to buy up land, homes and building parts.  These firms are making bets that the housing recovery is at hand.

John Paulson, a hedge fund manager who bet wisely against subprime mortgages back in 2006 and 2007 is just such a one now moving to snap up land.  Paulson has turned his head towards land in the hardest hit areas of the housing crisis.

Paulson and his company have bought up land in Arizona, Nevada and California.  Paulson & Co have plans to build upwards of 25,000 homes in these areas.  The company is still looking for more land.

Private equity firms are also looking towards housing investments.  Blackstone Group, BX, recently spent about 2.7 billion to buy up 17,000 single family homes.  These were mostly homes that had been foreclosed and the company continues to seek out more across the United States.

Another such company, Pine River Capital Management, is following suit.  Having taken the Silver Bay Realty Trust public back in December, they have already purchased some 2,500 homes and plan on buying up at least another 3,000 over the coming year.

Shares of publicly traded home builders have also been rising.  PUlteGroup, KB Home and Lennar are all trading higher than they have in the past 52 weeks.

Experts agree that more and more homebuilders are expected to go public.  The CEO of Foreclosure.com, Brad Geisen, says that he has been seeing quite a bit of interest amongst investors hoping to buy up large chunks of foreclosed properties.

Many investors feel that the market’s bottom won’t last long and as such they are striving to buy as much as they can right now.  To what extent these moves suggest an immanent recovery remain to be seen.

Likewise, because Vancouver real estate has not suffered the kind of crash seen across various areas of the United States, the market looks quite a bit different from here.  Nevertheless a U.S. recovery is obviously a good sign for homeowners everywhere and for those wishing to sell their Vancouver homes.

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