Zell Sees Start of Housing Recovery

I agree with Zell. It's almost like people feed off of negativity today. I'm not saying the real estate market hasn't been hit hard. I'm saying it's been getting hit hard for going on three years. The market decline may only be 3 months old to the general media, but for the rest of us, housing has been in decline for 3 years. - mt

Zell Sees Start of Housing Recovery in the Spring

The US economy will avoid recession as the housing market begins to recover this spring, according to billionaire investor Sam Zell.

Speaking on "Squawk Box" this morning, 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, chairman of Equity Investments Group and owner of the Chicago Cubs, Chicago Tribune, Los Angeles Times and other companies. "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.

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

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The Bottom?

I think we are much closer to the bottom than we are to the top. People who buy today are not going to be disappointed 5 years from now. - mt

Sales of Existing Homes and Prices Both Fall in January

WASHINGTON (AP) -- Sales of existing homes fell for the sixth straight month in January, dropping to the slowest sales pace on record. Median home prices were also down and many analysts predicted further price declines in the months ahead given high levels of unsold homes.

The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units. That was the slowest sales pace, going back to 1999, and was seen as evidence that the steepest slump in housing in a quarter-century has yet to hit bottom.

The median price of a home sold in January slid to $201,100, a drop of 4.6 percent from a year ago. Particularly alarming, analysts said, was the fact that the inventory of unsold homes jumped to a 10.3 months' supply, meaning it would take that long to sell the 4.19 million homes on the market at the January sales pace.

That was up from 9.7 months in December and just below a two-decade high of 10.5 months hit in October. During the peak of the housing boom in 2005, the supply of homes relative to sales stood at 4.5 months.

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Michigan: My Home

It's been quite awhile since I've posted, yet in the scheme of life, it was just a short time ago. So much has happened in my life it's crazy. The truth is, over the last 60 days, I've been through about 20 years of stuff. I'm just grateful to be here, alive and well, and doing better than ever.

Since it's been a couple months, I'm going to skip my promised article, and probably skip most of the economics all together. I have a passion for economics (hey, what can I say?), but I'm no Walter Williams. I can't explain it all in his simple, common sense manner. What I can do though is talk about stuff I like, and that's exactly what I'm gonna do here.

Now I don't know about you, but I'm tired of hearing all the negativity about Michigan. It's a bunch of bunk and it permeates the collective consciousness until all hope seems lost. I'd love a bunch of responses to this post, even those who disagree, but come up with something better than the "autos are laying people off/offering early retirements". Why? Because I'm 39 years old and I've heard that argument as long as I've been alive. I think 39 years of false predictions of hopelessness should be enough for anybody to realize that fallacy.

Markets go up. Markets go down.

As sure as the sun will rise in the morning, and set again at night, the markets will rise and fall.

Think about Michigan for just a little while. We have the Great Lakes! The largest sources of fresh water on the planet! Period. Amazing natural wonders unique only to us. We love the outdoors in Michigan. Who doesn't love "going up north"? Who else has that? We have some of the most amazing beaches, forests, lakes, rivers ... trails ... we have the largest groomed trail system in the United States with more than 6000 miles of trails! It's a blast for atv and orv's, but it's the ultimate in snowmobiling. I have snowmobiled from as far east as Upstate New York to as far west as the Rocky Mountains. As crazy as it may sound, the UP blows away the Rocky Mountains.

Has anyone been to Royal Oak lately? The place is booming! The Fifth Royal Oak will absolutely blow you away! I couldn't believe it myself, so go take a look for yourself. Realtors! Go check the place out! You may think I'm exaggerating, and that's okay. When you experience the place, you'll know I'm being conservative. And I mean this is the type of place that someone like Jennifer Aniston would own in NY City. There is simply nothing like it anywhere in Michigan.

I've read about some new office developments coming to town. These will help drive traffic to the local stores. I like to eat and be entertained, so I'm thrilled about Ronin, the new restaurant next to the Royal Oak Music Theatre. The food and atmosphere are simply incredible! The theatre is under stellar management and is bringing in more and more top-notch acts with better consistency, and you can see its popularity growing again. And anyone who's seen a good show at the theatre knows about Tania's awesome pizza right next door.

Drive around the neighborhoods of Royal Oak. More and more people are putting some investment into their homes and property. That's a good sign! People like it and are happy! People aren't "walking away" around here. Now as you're driving the neighborhoods, notice all the "for sale" signs, start looking, and get yourself a deal! Home prices are incredibly good right now. You're practically "getting away with something" at today's prices, particularly in Royal Oak.

Oh ... that's right, you're gonna wait to catch the bottom. Just like you caught the top too ... right?

I'm like Indiana Jones searching for that crystal ball, yet I've never found it. Why? Because there is no crystal ball. You have to make the right choice for you, at the time that is right for you. What the media says about "the market" doesn't dictate your life.

All I know is that if you're a first-time home buyer, or you've been leasing for the last two or three years ... prices for housing are low, and mortgage rates are low too. That's a one-two punch! Now is the time to take advantage of the situation and do something good for yourself. You deserve it! Go find yourself a home!