With home ownership rates continuing to decline, a new kind of single-family home purchaser has appeared on the scene ? big corporate investors. House values continue to be depressed in a great number of areas, and real estate trusts and investment funds have been swooping in on thousands of foreclosed properties across the United States in the hope of being able to manage residential properties in the same way that big real estate funds are able to hold office buildings and apartment complexes.
The trend is one that has accelerated as of late, with Fannie Mae announcing that its first two bulk sales of homes that had been foreclosed have been made to investment firms, selling 699 properties in Florida and 94 in Chicago to companies which have guaranteed to pay them rent for at least three years.
The giant federal mortgage finance firm is expecting to be able to sell approximately 2,000 units, the great majority of which will be single-family homes, in order to stabilize cities which have been badly hit by the housing crisis and to try to lighten its portfolio of foreclosed homes. These numbered around 109,000 four months ago back in June.
"We're in unprecedented times," admits Don Cogsville, the chief executive officer of the investment firm that bought the houses in Chicago, The Cogsville Group. Up until now, the company has focused on multi-family housing complexes and distressed commercial properties.
