Hedge fund manager John Paulson, who made himself a household name by earning $15 billion shorting the real estate market, now looks for a reversal in that market.
In a recent conference call with investors, the investment mogul reportedly predicted home prices will rise 3 to 5 percent this year and another 8 to 12 percent next year.
Paulson has become even better known in recent weeks, thanks to fraud charges brought against Goldman Sachs by the Securities and Exchange Commission.
The SEC alleges that Paulson had Goldman set up mortgage-related securities that he could short while Goldman encouraged other customers to buy the securities.
As for housing today, Paulson says it’s the most affordable of any time in the past 50 years and 60 percent more affordable than it was at the peak of the housing bubble.
Paulson also is bullish on stocks, both in the United States and Europe. He’s undeterred by the euro crisis, CNBC reports.
Paulson foresees "very strong" corporate earnings growth in the months ahead.
He’s looking for a V-shaped economic recovery, because only one-third of the $787 billion stimulus package has been spent.
With 23 percent of U.S. home mortgages now underwater, not everyone is bullish on housing.
“Having a lot of underwater homeowners will add to the downward pressure on house prices,” Celia Chen of Economy.com told Bloomberg.
“We do expect that home prices will fall a bit more.”
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