According to a report by CNBC today, Sam Zell, chairman and founder of Equity Group Investments, who has made billions of dollars in the commercial real estate market, said that the bottom of the real estate market is imminent. Across the country, the residential real estate market has seen positive data for the past 3 months in a row, which inspired Sam Zell to say, “The key to everything is single-family housing because that’s where consumption comes from. If people don’t have confidence in their biggest asset, they won’t have the confidence to spend.”
Zell pondered that an equilibrium has been reached, which in turn will stabilize the residential real estate market, as prices stop falling. He does not include Miami in this bottoming out, due to the excessive overbuilding that has taken place in the area, along with the multitude of subprime foreclosures. He expressed his dismay that the government is considering programs that would increase taxes, at a time when consumer confidence is key to an economic recovery. The entire interview with Zell can be seen in the video above.
_Alex Shay