Tuesday, February 11, 2014

Rental Home Securitization

Rental homes are the latest in the long list of financial assets that are been securitized.  On one hand, having capital moving into the real estate market should help to reduce the backlog of foreclosed homes.  But on the other hand it is hard to ignore our past experience of securitization.   The spectre of house prices being bid up to a point that creates another bubble looms large.

Another concern, as indicated by the graphic in the article, is the high density of ownership by a single investor (in this case - Blackstone)

It seems as though Blackstone is trying to control the market in rental properties in some locales. There really can only be one reason for this - and that is to have sufficient market power to control the rental level in an urban region.