BY GREGORY ZUCKERMAN
Wall Street Journal, December 29, 2011
Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.
Other investors seem to be making the same bet. Shares of home builders are up 30% since the end of the third quarter, as measured by the Dow Jones index tracking those shares, topping a nearly 10.5% gain for the Standard & Poor’s 500. Home builders haven’t outperformed the broader market by this much in a quarter since the third quarter of 2008.
“We turned bullish on housing. A rebound is coming,” says Andrew Law, chief investment officer at $10 billion hedge-fund firm Claxton. He expects that home prices and construction will rise in 2012.
“The housing-price bottom is probably in sight,” Goldman Sachs said in a December 15 report. Housing prices might decline by 3% next year before beginning a rise, Goldman says. The bank predicts gains of 30% over the following 10 years, not taking inflation into account.
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