This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Blackstone Defends Its Role in Housing Recovery

Investors have also been criticized for causing a supply shortage in cities where they are active. But Blackstone argues that the shortage is mostly because homebuilders have failed to keep pace with population growth. "Over the past 4 years, the US has added only 700,000 homes annually (single- and multi-family) on average, while population growth and obsolescence require an estimated 1.5 million units to meet demand," it said.

Blackstone also notes the housing recovery has been broad-based and not just limited to cities where it is active. Home prices were rising by 19% and 10% respectively in Salt Lake City and Detroit, where Invitation Homes is not present. This is because home prices remain well below their long term averages.

In any case home buyers and investors do not compete for the same homes in the first place, Blackstone argues. "Invitation Homes only buys post-foreclosure homes, after all attempts at loan modification and other measures have failed. Moreover, these homes are often sold at auction for cash, requiring settlement in three days and often significant capital expenditures in fix-up costs. Few, if any, first time home buyers can do this."

Meanwhile, private investors such as Blackstone are playing an important role in stabilizing housing prices, the company says. Foreclosed homes that are left vacant for too long often deteriorate due to lack of maintenance, dragging down prices of other homes in the neighborhood.

Blackstone has invested $500 million and employed thousands of contractors to fix up homes, in addition to the cost of the home. "When neighborhoods improve and house prices stabilize or rise, this is a good thing -- fewer homes are underwater and homes are easier to sell, which is good for both sellers and buyers."

Finally, investors such as Blackstone were adding to the single-family rental supply and was making rent affordable for families. Blackstone homes are on an average rented out at a 30% discount to comparable multi-family homes, the company said.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
XHB $35.26 0.03%
BX $42.55 1.94%
AAPL $128.70 -0.19%
FB $78.81 -0.23%
GOOG $540.78 0.54%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs