Hopes that plunging American residential property prices may soon start to bottom out were raised yesterday after one Wall Street fund that specialises in buying distressed real estate revealed plans to start spending its $1bn (£504mn) investment portfolio in the next three to six months. The Times
Weis Group, a New York-based fund, said that it was in talks with a handful of America's biggest banks to acquire residential property that has been seized by lenders and is languishing on their books.
The move comes a week after Robert Shiller, Professor of Economics at Yale and co-founder of the S&P Case/Shiller house price index, said that declines in American property values could double before they start to recover. Prices have fallen by around 15% over the past two years, he said, but losses could be greater than during the Great Depression, when values fell by 30%.
Weis has spent the past two years earmarking key sites - typically vast, half-finished property projects such as gated communities in Southern states. The fund wants to complete these developments and sell them on in three to five years.