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Billionaire Investor Sam Zell: Housing Has Bottomed, On Its Way Back Up

Published on February 27, 2008 by Sherri Dodsworth under Business, Cape San Blas, Real Estate

Are we there yet? Are we there yet? Are we there yet? Like roadweary vacationers anxious for the ride to be over and finally reach the destination where the fun begins, we’ve all been wanting to know when this market will finally reach its bottom and begin to turn around. Encouraging news heard this morning from a guy with a good track record for recognizing and calling economic trends and earning gazillions by doing so. I found the following on CNBC’s website:

Billionaire Investor Sam Zell Appearing on CNBC's Squawk Box According to billionaire investor Sam Zell, chairman of Equity Investments Group and owner of the Chicago Cubs, Chicago Tribune, Los Angeles Times and other companies the US economy will avoid recession as the housing market begins to recover this spring. Those looking to invest in real estate in a recovering housing market may want to consider doing so in the emerging neighborhoods of North Carolina where online listings are showing many attractive properties for sale piquing the interest of many potential buyers; see here to get an idea of the types of properties that are getting people excited to move to the area –

Speaking on “Squawk Box” . . . , Zell attributed much of the current economic troubles to fear-mongering and politicking by Democratic presidential contenders Hillary Rodham Clinton and Barack Obama.

“Obviously what we have going on is an attempt to create a self-fulfilling prophecy,” said Zell, . “We have two Democratic candidates who are vying with each other to describe the economic situation worse.

“The reality is that if you live on Wall Street and you’re in the credit markets the world couldn’t be worse. If you’re a farmer and you’re getting $25 for your wheat, you’re having a great time. If you’re a CEO and you’ve got a balance sheet that’s bullet-proof, you’re in a great position. This whole thing is way out of control, way out of hand.”

Zell said that although he doesn’t try to pick bottoms in markets he believes housing has hit its nadir and will turn around this spring as inventory clears out (emphasis added).

As for the credit situation, he projected that once markdowns are out of the way banks will begin to regain their footing.

In the wide-ranging interview, Zell also voiced support for Federal Reserve Chairman Ben Bernanke.

“I think Bernanke’s reduction in interest rates has been spot-on, because basically we’re going to fix the credit markets by creating a big enough spread between the risk-free cost of capital and what’s available so that greed overtakes fear and the game begins again.”

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