After posting three straight months of positive data, the residential real estate market has reached an equilibrium where prices will stop falling, said Sam Zell, founder and chairman of Equity Group Investments. This, in turn, will spark stabilization throughout the rest of the economy.
“The key to everything is single-family housing because that’s where consumption comes from,” Zell said. “If people don’t have confidence in their biggest asset, they won’t have the confidence to spend.”
While this equilibrium most likely won’t spread to cities like Miami, where there is excessive overbuilding and subprime foreclosures, most markets will see stabilization this fall.
Read Krystina Gustafson’s full article “Real Estate Bottom Will Turn Around Economy: Zell” in CNBC (July 28, 2009).