From afar, U.S. real estate is a compelling story.
House prices have fallen drastically. Mortgage interest payments are still tax deductible. The country's housing supply isn't being replenished because construction has dropped off.
But with all that working in the housing industry's favour, there is still a lot of pessimism. What could possibly turn the market around?
"I think the only thing missing is confidence," said hedge fund manager Bill Ackman at a lunch this week hosted by Davies Ward Phillips & Vineberg. Mr. Ackman knows a thing or two about real estate, considering he helped turn around General Growth Properties in the heat of the financial crisis.
"All you need is a relatively small turn."
On top of the underlying fundamentals mentioned, Mr. Ackman said that U.S. apartment REITs offer some proof. Rental rates are bound to go up, he said, which means that people will ultimately start looking at houses again.
Asked for a prediction of when the recovery could really take hold, Mr. Ackman said he expects a turnaround by spring of 2012.
Mr. Ackman also offered a comment or two on gold, which is still above $1,500 (U.S.) and ounce. The remarks echoed those made by Warren Buffet at his annual general meeting this year. (On that occasion he said that if you put all of the world's gold together, it would create a 67-foot cube.) "Would you rather have faith in that, or McDonald's, which has 32,000 stores?" Mr. Ackman said.
"I've never believed that gold is an investment asset."