Tags: faber | housing

Marc Faber: It May Be Time to Go Long US Housing

Sunday, 19 February 2012 04:32 PM

Marc Faber, the investor and analyst best known for contrarian calls on precious metals and currencies, thinks it’s high time investors look again at U.S. housing.

The editor of the Gloom Boom & Doom Report told CNBC that homebuilder stocks were up but that property itself hadn’t followed along.

"If you look at the supply of homes, new construction, and you compare it to immigration into the United States, to the growth of the population, then these markets are very attractive from a longer-term perspective," Faber told CNBC, speaking of southern U.S. markets, including Sunbelt locations such as Atlanta, Phoenix and Miami.

Investors could make, he estimated, an 8 percent annual return on rentals at a huge discount to construction cost as much as 50 percent in some places.

In Faber’s view, major funds would have a hard time capitalizing on the opportunity.

Hedge fund manager Kyle Bass, however, disagrees. He’s putting together a $500 million fund to buy home-loan securities once trashed as toxic — subprime loans, according to a Bloomberg News report.

Other names joining the subprime land rush include hedge fund manager John Paulson, who made billions betting the collapse, Goldman Sachs Group, and American International Group, the huge insurer that had to be bailed out by taxpayers followed the credit collapse, Bloomberg reports.

Low housing prices have hurt the economy, Federal Reserve Chairman Ben Bernanke said in a speech.

"Recent declines in housing wealth may be reducing consumer spending between $200 billion and $375 billion per year. That reduction corresponds to lower living standards for many Americans," Bernanke told homebuilders in Orlando, Fla.

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Sunday, 19 February 2012 04:32 PM
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