Sam Zell is one of the best real estate investors around and therefore one of the few people whose prognostications for the housing market are actually worth listening to.
And that's good news because, speaking on CNBC's Squawk Box this morning, Zell had this to say about the housing market: "I think starts have already pretty much bottomed out," Zell said. "I think the housing market this spring will begin its recovery phase."
If the recovery will indeed begin that quickly -- and the bottom has already been reached -- than beaten-down REITs have to be considered for investment.
If you're willing to invest based on the idea that Zell is likely to be right but aren't comfortable picking REITs on your own, Vanguard's REIT ETF (AMEX: VNQ) may be worth a look. After a big drop in 2007, the ETF yields around 5%.
Sam Zell sees real estate turnaround this spring
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Reader Comments (Page 1 of 1)
2-26-2008 @ 3:10PM
David Huston said...
To which housing market was Sam referring: residential or commercial? If to the former, has he visited Las Vegas, California, Florida, Michigan, Ohio, ....etc. lately?
2-26-2008 @ 3:27PM
Sheldon L said...
To clarify on behalf of Mr. Zell, who remains one of the best investmnt minds in the country even at his ripe old age.......and because I am actively involved in every type of real estate.
When he set his sights on spring he did not mean that all will be right with the world. He meant the industry will start to crawl out of the swamp.
Developers will have to start in the spring because land acquisition, environmental clearance, design, planning and approvals is a 12 to 18 month process. Add another 12 to 18 months for construction and you are in the summer 2010 market at the soonest.
2-26-2008 @ 5:27PM
al coholic said...
I've been in the construction business since the late sixties and I think poster #1 makes a valid point.
Construction employment has totally changed in the last 15 years. Even small companies have turned all their help into 1099 guys. Everything is outsourced, even the secretaries. Comparing unemployment figures to earlier times is futile. As Bucky Covington sang it, "We're in a different world."
2-26-2008 @ 5:33PM
G. G. Bjorklund said...
Mr Zell should re-take his fifth grade arithmatic lessons. The true un-employment rate is close to 9% if you take the people laid off as independent contractors. Their homes will be on the market in addition to what is now in forclosure. Employees who have their leases on the autos will have them repossed and will not be able to get to their jobs and persons who have maxed out their credit cards will go bankrupt causing lay-offs in the banking business. Shops will be closed as a result of this to add to the problem. His only redemption will be that he said the recovery will be this spring which could be 2011.
2-26-2008 @ 8:57PM
LeadingRich.com said...
I think that the market will continue to go down until the end of the year. Bottom fishing is difficult in Real Estate and no one has ever been able to do it. You only know 3-4 months after the fact. Given that mortgage rates are going up, many people may be running away from purchasing. http://leadingrich.com/2008/02/21/bankrate-mortgage-rates-post-biggest-increase-in-14-years/
I guess Zell has made millions in the Real Estate biz, so he must know when to bottom fish. But also when you have a lot of money you can make a lot of money.
http://leadingrich.com