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Investors Force Sacramento Area Home Prices Up

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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.

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  • dymndluv

    I DO NOT understand how anyone thinks his is fair! A person works and saves up money their whole life to be able to get to this point and when they do they are constantly being outbidded by an investor who only wants to rent the home to make money off of it. Why can't anyone come up with rules that an investor can't buy more than 5 in one zipcode. This is ridiculous! I am really starting to hate states that allow this to happen, especially California!!

  • evilahole2

    Life isn’t fair and when you try to legislate fairness things go to нell. There never has been and never will be a utopia. Move to north korea if you don’t like capitalism because this is the free market at work.

  • mmcclain1974

    First of all…you need to calm that down telling people to move to Korea! Simply not polite! If you have a constructive comment then post that…but all the extra commentary is inappropriate! People can post what they feel without having someone be abusive to them like you did. If you choose to reply to this comment with anything destructive or abusive you will be reported!!!

  • emelysse

    The hedge fund people and their white collar thugs on wall street profited from the subprime fiasco that was not only lower income people not being able to pay mortgages, but house flippers with bucks who walked away when their flip flopped on it's ass after housing prices took a nose dive in the fall of 2007. These are the same people who got bailed out with hundreds of millions of tax payers money — the banks and the wall street thugs. Now here they are again creating another bubble with OUR money they got bailed out with. The best thing to do is boycott their newest bubble so it bursts QUICKLY. Don't buy a damn thing and prices won't go up. Strange, if they have so much god d*&ned $$$ why aren't they buying and flipping (or renting out for 10 to 20,000 per month) all the 3 million dollar homes in the hamptons, malibu, beverly hills, palm beach etc etc??? Oh that's right …they wouldn't want to displace and otherwise ruin the lives of their own. In the meantime… there must be some type of anti trust law about one wall street cartel buying up all the land in several major cities across the u.s. If not, time to make anti trust laws to stop BIG LANDLORD from buying up all the low to moderate priced housing so that everyone making below a six figure income is a rent slave until they day they die!