Fannie Mae Auction May Stabilize Rental Prices
Rental prices may stabilize or even drop in the near future due to the proposed Fannie Mae Bulk Real Estate Auction for real estate investors.
To help stabilize the market, the government announced it is launching a bulk real estate sale program to investors looking for rental properties. Since Government agencies already own hundreds of thousands of foreclosed properties, adding properties for sale specifically for the rental market will help stabilize rental prices and may even lower rental prices in some areas. Selling these properties as rentals may help the real estate market by simply not adding them to the large unsold inventory of homes.
A recent article in Barron’s about the Fannie Mae Auction put forth this information,
“Corporations, partnerships and non-profits with at least $5 million in assets are expected to flock to the pilot auction, which hasn’t been scheduled yet. But there also will be a place for individuals with incomes exceeding $200,000; couples with combined incomes over $300,000; and individuals and couples with a net worth of more than $1 million, excluding their primary homes.”
The pilot auctions will be held in cities hardest hit by foreclosures including:
- Ft. Lauderdale
- Atlanta
- Chicago
- Detroit
- Las Vegas
- Los Angeles
Bidders must have a proven track record as successful landlords. The properties to be auctioned may currently be rented or vacant, but must continue as rentals for a yet unspecified period of time. They cannot be flipped for a profit. Here’s a link to get information on these upcoming auctions.
Since 2009 almost all new households have been rentals. As a result, rental prices have gone up. So yes it will help stabilize the rental market, and get REO’s off the government’s books. It may even help stabilize neighborhoods, but the overall real estate market? I’m not so sure.
