Billionaire Predicts Upward Trend in the Spring For Real Estate

It’s always been said that the spring months are usually a new beginning and in a recent article in the Chicago Tribune, billionaire Sam Zell predicts that the Spring will be the beginning of a housing recovery for the United States. The whole subprime mortgage debacle has left a lot of people in a panic but Zell, who is the chairman of Equity Group Investments, believes that the panic will be ending soon enough.

Zell has used the textbook definition of recession in his assessment that the market has hit rock bottom and will only go up from here. He suggests that sales will start to happen again soon and the overwhelming inventory will start to decrease, perhaps allowing housing prices to come back up a bit. With a history without a first quarter with negative growth, his predictions do have some merit.

Zell notes that the reappointment of Ben Bernanke to the Federal Reserve is an important part of the recovery equation. Bernanke has reduced interest rates, therefore creating a gap between the risk free costs of capital and what is available. This allows for the panic and worry to die down, for greed to take hold, and for the sales to start up again. With spring and then summer right around the corner it will be interesting to see how spot on Zell’s predictions for our housing market, and therefore our economy to a large extent, truly are.

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