[quote=Huckleberry]This is NOT an accurate account of what is happening.
1. Hedge funds are already saddled with HUGE losses related to CDO’s, why would they go out and start purchasing hard assets related to RE? They wouldn’t!
2. Hedge funds typically have an ROI around 20% annually. Unless they have run their risk modeling and it shows So. Cal. RE is going to go through a “V” shaped bottom and return to it’s bubblicious state in the next year, there is no way they would invest in houses.
3. Hedge funds do not invest in hard and illiquid assets. They have to be SUPER nimble in the markets. Hedge funds are day traders, not long term buy and hold investors.
4. These same principals hold true for money management companies, mutual funds, asset management company’s, holding corporations, etc…
This is hog wash![/quote]
This is absolutely happening. But it’s not “hedge funds” doing the buying, but rather “private equity funds” with money tied up for 10+ years. I know of a group in Orange County that has bought over $1 billion of properties from the FDIC and lenders over the last year. But… this buying isn’t driving prices, I don’t believe, because it’s still a small part of the overall market. The marginal buyer is still a homeowner or small investor. But plenty of institutions are out there bidding on bulk packages. I have first hand knowledge.
