By Tim Logan LA Times March 29, 2014,
This time last year, investment firms raced to buy dozens of single-family homes in neighborhoods from Fontana to South Los Angeles to lease them out, transforming the mom-and-pop rental business into a Wall Street juggernaut.
The flood of cash helped spark a steep rise in prices, drawing criticism for pushing families out of the market.
But now the firms themselves have all but stopped buying in Southern California, the latest evidence that home prices have hit a ceiling.
The professional investors no longer see bargains here.
The real estate arm of Blackstone Group, the largest buyer, has cut its California purchases 90% over the last year, a spokesman said. Santa Monica company Colony Capital reports a similar retreat.
Oaktree Capital of Los Angeles, meanwhile, is looking to cash out by selling its portfolio of more than 500 homes, many of them in Southern California.
The shift is giving regular buyers more homes to choose from, at least those who can still afford them.
Experts say an expanding supply should help usher in a healthier housing market, with a better balance between buyers and sellers.
That's a stark change from last year, when buyers faced bidding wars.
All the activity drove the region's median home price up to $385,000 by last June, a record 28% increase over the same month a year earlier, according to San Diego research firm DataQuick.
But prices have since been flat in Southern California.
Among the 20 firms buying the most California real estate since January 2012, purchases are down more than 70% compared with last year in each of the last four months, according to DataQuick.
