Rampell describes this trajectory as follows: "There’s a popular perception that so-called McMansions and Garage-Mahals brought down the housing market. Yet more than half of all homes that went into foreclosure between 2007 and 2012 were actually in the lowest price tier when they were purchased, and most were located in middle- and lower-income areas. As foreclosures mounted and home prices plummeted, observers have noted, it was disparately the wealthier investors who bought them up at bargain prices. (Credit was hard to come by, after all, which benefited cash buyers.) Blackstone, the private-equity giant, bought almost 30,000 homes around the country and now has a nationwide single-family-home rental platform. . . .
Now, five years after the start of the financial crisis, the housing market has come back, and many of these investors are cashing in. According to tabulations by Redfin, an online real estate listings site, banks have already sold about 1.5 million of the nearly 2 million homes that were foreclosed on during the past half-decade. Resales are becoming more common and can be hugely profitable. A house in Redwood City, Calif., for instance, was sold in a foreclosure auction in 2011 for less than half what the evicted owner paid in 2006. Ten months later, it was flipped for close to its previous price. Another house in Los Angeles went into foreclosure in 2012 and was flipped seven months later for a markup of $254,000, or 66 percent. Of the 87,062 foreclosures in the last five years that were bought by corporate investors and have been flipped, about a quarter were sold for at least $100,000 more than what the investor originally paid, according to Redfin."