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Hedge-Fund Guys Have Foreclosure Fatigue

Jonathan Miller writes about the housing economy and other aspects of real estate. He began a real estate blog, the Matrix, in 2005, and has written a column for Curbed.com. He is co-founder of Miller Samuel, a residential real estate appraisal company, and the commercial valuation firm Miller Cicero.
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One of the most important ways to strengthen the U.S. housing recovery is to get distressed properties into financially stronger hands. Shortly after the financial crisis began, institutional investors started snapping up foreclosed homes. These buyers, according to RealtyTrac, are entities that buy more than 10 properties in a calendar year. Blackstone Group has been among the most active, acquiring more than $20 billion of foreclosed properties, then making necessary repairs and renting them out.

Although institutional buyers have played an important role in the market's recovery, the perception of their participation is much greater than the reality. They now make up 4.3 percent of all buyers, down from the 6.1 percent peak in early 2013. Small investors, rather than big institutions, account for the majority of distressed-property purchases.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Jonathan J Miller at jmiller@millersamuel.com

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net