NEW YORK — Blackstone Group LP, which has spent $5 billion to acquire almost 30,000 U.S. single-family houses, is nearing the later stages of its buying as home prices jump, said Jonathan Gray, the firm’s global head of real estate.
The market has become more “challenging” as competitors enter the business of buying homes to rent out, Gray said Monday.
Blackstone (NYSE: BX), based in New York, has acquired houses in 13 metropolitan areas and is continuing to make purchases, he said.
“For our type of capital and the returns we hope to generate, my guess is we’re in the later stages of this,” Gray said. “That does not mean the housing recovery itself will not continue for a number of years.”
Blackstone is the largest of the private-equity companies taking advantage of the foreclosure crisis to build portfolios of single-family homes to rent, helping to diminish supply and drive up real estate values in some areas.
U.S. home prices jumped 10.9 percent in March, the most in seven years, according to the S&P/Case-Shiller index of 20 cities.
Blackstone’s purchases represent a fraction of the U.S. housing market and rebounding prices are the result of basic supply and demand,
Gray said. U.S. population growth has outstripped homebuilding because property prices aren’t high enough to spur new construction, creating a shortage, he said.
“There are about 150 million homes in the United States,” Gray said. “We own about 29,000. In the last year, there were 5.6 million homes bought and sold. Of those, we were 24,000. We are a very small percentage.”
The housing recovery is “midstream,” with the eastern part of the U.S. representing good value, Gray said.
National prices are still down about 28 percent from the 2006 peak, according to the Case-Shiller index.