Getting a house has been tough for owner occupied buyers in the Sacramento region because investors have the upper hand with cash offers, often over the asking price.
“We are competing with a lot of these all cash hedge fund buyers, as well as other investors,” said Keller-Williams Realty agent Chris Saizan.
Saizan works out the Elk Grove office but the tight housing market extends throughout the region. A major player is an investment firm called Blackstone, which has announced that it will spend $2 billion dollars to buy up modestly priced homes throughout the country.
It has purchased 1,200 homes in the Sacramento area in the last six months and is likely to buy more before prices rise too much. One of Saizan’s clients is a victim of the buying frenzy.
“We’ve made 18 offers since August and we have been getting beat out on every single one of them,” said Saizan.
On the other hand sellers are reaping the benefits. One of Saizan’s recent sellers got 14 offers in 48 hours.
“I listed it for $299,000 and it sold for $342,000,” said Saizan.
Saizan said most investors are looking to buy and $200 thousand and below so they can rent them out. But he has talked to hedge fund buyers who say they are willing to pay more in cash because they are looking to sell when the prices are much higher in perhaps five years.
Blackstone’s website has a video touting its strategy of buying homes, fixing them up and eventually selling them. It says renovating homes on a large-scale helps the economy, provides fixed up homes for renters and an eventual return for investors in the fund. It says many investors are pensioners.
One homeowner in South Natomas, who identified herself only as Penny, lives down the street from a recent Blackstone purchase says so far so good. But she is wary of corporate landlords.
“They jumped in with both feet and spruced it up real nice but that’s the beginning and we have no idea how the story will end. Obviously they’re a for-profit company,” said Penny.
She may put her house up for sale soon and is worried if the right tenants will move in and if the house will be maintained.