In an effort to clear out the glut of unsold properties in today’s real estate market and prevent home values from continuing their downward spiral, the Obama administration is considering pulling foreclosed properties owned by Fannie Mae and Freddie Mac off the market and renting them out. This could, according to Credit Suisse analysts, ultimately help avert another 3-5 percent decline in home prices. Although this move would place the federal government in the somewhat controversial position of landlord to potentially thousands of tenants, the proposal to “trim the glut of unsold foreclosed homes on the market is worth looking at,” according to Federal Reserve chairman Ben Bernanke in testimony to Congress last week.
Given that national rent rates are on the rise, it will probably surprise no one that the cash-strapped federal government is considering getting involved in this aspect of real estate. However, another idea rumored to be on the table is that federal officials might sell the foreclosed properties to investors in bulk to rent out. Do you think either of these options will work?
Thank you for reading the Bryan Ellis Real Estate Letter!
Your comments and questions are welcomed below.