Real estate investment companies scooping up distressed properties across the United States have been an important part in helping the housing market turnaround, according to The Economist.
Foreclosures and short sales have allowed investors like Steve Schmitz of Phoenix-based American Residential Properties to acquire 1,000 properties since 2008 in the Southwest, The Economist wrote. Recently, Schmitz bought a home in Phoenix for about half its peak selling price of $300,000 and-after repainting and carpet cleaning-began renting it for $1,300 a month.
As a result, the stock of vacant, foreclosed homes has shrunk, the stock of new homes for sale is the lowest on record, and home construction has revived. "This is a welcome change," The Economist wrote. "Housing is typically one of the most powerful engines in the early stages of recovery, with purchases of homes revving up spending on furniture, carpets and garden landscaping."
Still, the number of homes in foreclosure remains "painfully high," and high unemployment has temporarily "depressed the underlying demand for new homes."
The full story from The Economist can be read here.
