Posted By thestatedtruth.com on January 21, 2010

Jan. 21 (Bloomberg) — More than 40 U.S. homebuilders have teamed up with private equity firms to acquire and complete unfinished subdivisions as banks cut construction lending.

The investments will pay off for the builders and their investors if the prices are low enough and the locations are in areas where demand is recovering, said Megan McGrath, a home building industry analyst at Barclays Capital Inc. in New York.

“I’ve been getting the question: Why aren’t housing starts at zero?” McGrath asked. “The answer is, they’re probably as close to zero as they’re going to get and in some cases it still makes sense to build.”

Managers of at least 22 funds raised $12 billion in 2009 for development projects and other residential real estate deals, Bloomberg BusinessWeek magazine reports in its Feb. 1 issue, citing data compiled by Bloomberg, Institutional Real Estate Inc. of San Ramon, California, and Real Estate Alert, an industry newsletter in Hoboken, New Jersey. Those firms have invested with at least 42 builders, the data show.

Home building permits climbed to 653,000 in December, the most since October 2008 and a sign of optimism about demand, the Commerce Department reported yesterday.

More at ……http://www.bloomberg.com/apps/news?pid=20601109&sid=a3R7wGx9kIYw&pos=10

 

 

~~~~

Categories: Commentary, Commodities, Economy, Finance, National News, Real Estate, Wall Street
Tags: