Hedge fund operators and private equity investors — the Wall Street pros who snapped up homes for a steal following the market meltdown — are now making their exit, real estate attorney Stephen Meister told Fox Business Friday.
The Wall Streeters’ departure, in conjunction with a cold winter slump, pulled down existing home sales in February, Meister said on the Willis Report. The investors moved into overheated markets like Phoenix, California, Florida and Nevada after the recession, and are keen to make an exit now that prices have jumped up as much as 12 percent in the last year.
Wall Street investors’ mindset, Meister said, is “let’s get out of dodge and sell those houses.”
The unloading may bring home prices down, but any such dip will be tempered by a jump in mortgage rates, Meister said. And mortgage lenders are unlikely to be as free, which will make activity in the housing market an ongoing challenge for first-time homebuyers.
“They’re the beginning of the food chain, so to speak, and they’re saddled with a lot of college debt,” Meister said on the program. “That’s also impinging the market a little bit.” [Fox Business] — Julie Strickland