Well it seems that Wall Street is finally helping Main Street by driving up single-family home prices in quite a few places around the country.
"There were stories in 2012 of people being outbid for
homes—individual homeowners getting outbid by all-cash buyers," said
Steve Berkowitz, CEO of Move Inc., the parent of Realtor.com.
Blomquist said buying activity really started to pick up in mid-2012
after Warren Buffett said on CNBC that he would buy up "a couple hundred
thousand" single-family homes and rent them out if he had the
logistical ability to manage the properties.
"That was really
when there was a paradigm shift in the market," Blomquist said. "We
started to see these institutional investors jump in and buy single
family homes."
They see value in homes that are selling at a deep discount to what they see as their fair market value. I mean in many cases the idea of a stream of rental revenue is beating nearly anything that an investor can get into. If they think the stock market is overvalued and 1 year treasury bonds are yielding like 0.13% then real estate rentals can look quite lucrative in comparison. They could even flip the house or eventually use the equity in order to leverage themselves up if they wish.
This might also be a lucrative new business for a company that provided the "logistical ability to manage the properties" that Buffett is talking about. The investor just writes a check on a certain amount of properties and the company does all the dirty work like listing the rental, making sure there is a person to fix the toilets, etc.
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