As 2013 unfolds, it’ll be interesting to see where this year heads in terms of real estate. Everyone and their Mom has predictions and strong beliefs of course, but we’ll see how things pan out. One of the groups I do think we should continue to watch closely this year though is Blackstone (THR California). Since entering the market very strongly last August, they set themselves apart as the most aggressive hedge fund buyer in the Sacramento area (so far), which makes it important to see how their strategy plays out.
Icebergs & Prices: The market under $200,000 has been a prime target for investors, so this graph is no surprise. In fact, the price focus of THR California / Blackstone so far reminds me of an iceberg. Just as the vast bulk of an iceberg is under the water, with only a smaller portion above water, 81% of the purchases by Blackstone have been under the $200,000 level, with only 19% above that mark. I know iceberg purists are going to tell me icebergs are usually estimated at about 85-90% below water, but hey, it’s similar enough to get the point here, right?
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NOTE: The graph above is based only on information provided from Tax Records / Realist. As of 01/22/2013 there were 465 sales in the name of “THR California” since August 1, 2012. Blackstone is not new to the market of course since they do own almost 900 properties in the Sacramento area that they’ve purchased through the years, but the rampant purchasing over the past two quarters has really increased their local holdings. Some sources indicate they have purchased far more than 465 sales over the past months, though I am only going by what I see in Tax Records. If someone else has another source, speak on.
Questions: What do you think is going to happen to the market under $200,000 this year? What dynamics are you seeing play out during every day real estate transactions?
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