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SAM ZELL: HOUSING BOTTOM BY SUMMER

Sam Zell we are on the verge of seeing a bottom in housing prices.   Speaking at a convention in Las Vegas, Mr. Zell told the audience:

“Housing market stability will appear sometime this summer.  I can’t tell you if it’s June 29 or August 1.”

“That will be very positive for retail sales,” Zell said.   “I think the days of extraordinary expenditures without regard to cost to keep up with the Joneses is less likely a case going forward.  I envision a slow unclogging of the worldwide financial system, which ultimately will be positive for all of us.”

“This is a worldwide recession and not a U.S. recession,” said Zell.

“But the U.S. will recover and recover first around the world because we have a culture and we have an environment where we face up to reality quickly and effectively as opposed to many other counties in the world which create zombie environments because they are not able to face up to reality,” he added.

I’m not sure which part of this commentary I have a bigger issue with:  Zell’s idea that the U.S. has not created zombie banks, his idea that the U.S. will rebound first (considering the fact that China has already emerged from recession before the U.S.) or his idea that housing will bottom in the next 3 months despite a 18.6% year over year decline in the Case Shiller Housing figures.     It might be safe to assume that Mr. Zell has his investment thesis a bit off kilter or he is just talking his extremely large commercial real estate book.

8 comments
  1. Avatar
    prescient11

    Brother, Zell was calling for a housing bottom in April of ’08. In my estimation, it does not bottom until early 2011. jmho.

  2. Avatar
    eh

    @prescient11

    Absolutely right. (But he’s not alone — early on Bernanke said subprime was “contained”.)

    Zell is a buffoon, plain and simple.

  3. Avatar
    mike

    Zell top tivked the CRE market, but made a big mistake in the newspaper biz, which he acknowledges. don’t know about his resi real estate calls, but I like some would be very skeptical that the worst is nearly over. green shoots my a$$!!

  4. Avatar
    Cullen Roche

    He certainly did. But keep in mind that he still owns a ton of CRE. Taking credit for top ticking the CRE is like saying that you sold 20% of your holdings so you’re a genius because only 80% of them took the downside hit….

  5. Avatar
    wex

    I thought he only kept his residential RE and substantial foreign holdings. You gotta give credit to aguy who sells $40 bill and still has substantial holdings

  6. Avatar
    DBoy

    You might recall that Sam Zell top-ticked this economic crisis. Also consider that due to his various businesses, he has non-public data points to use in his analysis…which the rest of us don’t have. That’s why it’s news when he speaks.

    dboy

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