Calling the CA Real Estate Market

A special update for those living in California and interested in our state's real estate picture.

Those of you who know me a little, know I'm passionate about investing.  Stocks, bonds, commodities, real estate...this is my idea of golfing on the weekends.

Only a few of you, who know my deepest secrets, know I have man crush on the Newport California based bond company PIMCO.  In short, the company is run by two of the best fixed income minds in the game today, Bill Gross and Mohamed El-Erian.

In last weekends Barrons magazine, their top manager was interviewed.  "Top manager" might be a bit of an understatement, Mark Kiesel was Morningstar's 2012 Fixed Income Manager of the Year.

You see, Mark has written a couple of prescient articles on the housing market. He has also put his money where his mouth is, and in 2006 literally packed up all his belongings, sold his home, and rented.  He summed up the reasons for his exit, in his paper entitled "For Sale."

A year later Kiesel wrote "Still Renting," showing he still was betting against the housing market.  We all know what happened from 2008-2011.

Well now Mark is back, figuratively and literally.  In May of 2012 he purchased a house in Newport and wrote his latest housing paper called "Back In." He says, "the way to make money is to be as overweight housing as you can, because we are going to see the beginning of probably a four-to-five-year upcycle in housing."

He also points to data saying, "today there are 36% fewer homes for sale in the state of California than when I bought my house a year ago...so where people want to live, there is almost no supply."

I'm not in Mark's league, so I don't try to predict market cycles.  But I do now have Mark's blog page bookmarked.

Where do you think we're headed?  Hit reply and let me know.


Notes:

Mark's article "Back In" written about this time last year.

http://www.pimco.com/EN/Insights/Pages/Global-Credit-Perspectives-May-2012.aspx#

I can't bookmark the article to Barron's, but you can Google "barrons, kiesel" and find the full article.