Two observations:
1. This is another sign the housing market has hit bottom, and
2. This is an “efficient” market-clearing development that has more good results than bad.
It appears that large players, REITS, are discovering the profitability of buying distressed homes in bulk from government entities, fixing them up to be rental grade, renting them for 3 years, then selling them with half the cap. gain to go to the government.
I’d call that mostly good because it gets distressed and deteriorating houses fixed up and put to use, helping neighborhoods and renters seeking housing. The REITs can be far more efficient at fixup than many amature “flippers” since they have enormous economies of scale in knowing how and what to fix up, buying supplies in bulk, using the same knowledgeable contractors repeatedly, etc.
Instead of the inept government owning and (mis)managing these assets, a profit-motivated, cost-conscious private sector actor will take over, make (taxable) profits, and eventually put these fixed-up houses to better use. I’d call that mostly good.
The fact that REITs are doing this is an indicator the housing market, at least in Florida, has hit bottom, and also that large-scale landlording is a good place to be.
