Goldman Sachs Group, Inc. (NYSE:GS) has made indications today that they see a strong recovery coming in the real estate market. The company has started a new fund trading in home loan bonds and other non government backed security.
The news demonstrates the confidence the bank has in the recovery of the housing market and should be received well by analysts. Despite less than perfect data from February the US housing market is seen to be recovering well and should continue to come back from its depression for the remainder of the year. The fund will be titled in that vein as well. It is called the US Housing Recovery Fund, a mark of the aims and strategy involved.
The fund is currently collecting capital but should begin investing soon. The firm already holds a great amount of home loan debt it won in an auction by the Fed of the American International Group. That debt was not sold off immediately in a break with practice at other banks, such as Credit Suisse, who won similar holdings. One can imagine that the debt taken in that transaction will be used by the fund.
Goldman’s new fund follows on the heels of other investment funds which have recently gotten into the market for debt. Others in the same area include Kyle Bass, Metacapital Management, Cerberus Capital Management, CQS UK and canyon partners.
Robert Shiller, Professor at Yale University, and the co-founder of the Case-Shiller index, has also made some more bullish comments about housing recently. Shiller in the past has been very bearish on housing. His track record has been pretty good, since he predicted the housing bubble in 2006. Shiller also is famous for successfully predicting the crash of the tech internet stock bubble. Shiller stated in a recent interview that the housing market has “a chance” of rebounding despite the downward momentum in the real estate market.
