U.S. domestic prices have rebounded from the 2008 housing market explode, but demand is still low due to changes in living and buying habits of millennials, legal estate mogul Sam Zell told CNBC on Wednesday.
“It’s interesting that all the statistics recently on covering suggest that demand is down but prices aren’t down. That doesn’t inevitably make sense,” the founder and chairman of the property specialist firm Disinterest Group Investments said on “Squawk Box.” “We’re dealing with a metamorphosed housing market.”
Homeownership dropped from an all-time high of approximately 70 percent in 2005 to 63 percent in 2016, according to just out data, and the decline has been significant among people younger than 30 compared with other starts.
Those numbers, Zell contended, are a reflection of affordability, location and timing. “We’re apportioning with a housing market that is much less dependent on starter cover than historically has been the case.”
The change in habits can be attributed to the millennial contemporaries, particularly particularly those in their upper 20s and 30s, who are more likely to deferral getting married, having children, and saving money.
Zell doesn’t of millennials, who are more likely to have kids in their 30s rather their 20s, are a “new species or new DNA. But he sees the change in habits as new opportunities in the market.
“That means that we participate in a huge group of people with enormous disposable income that we scarcity to address and deal with as customers,” he said. “I, eventually, think that they’ll buy domiciles and have children, but I think with a much more connected-to-the-center-of-the-city advance.”
The billionaire investor also points to other factors, such as savings, as for why want for homes is low. Statistics show that the savings rate is also down to great lows, which affects the economy, he said.
“If you don’t have savings, you don’t record down payments,” Zell said. “Therefore, the housing market is acted upon quite dramatically.”