(Bloomberg News) Mark Kiesel, the Pacific Investment Management Co. managing director who sold his home in 2006 when he deemed the market a bubble, says it's time to buy.
"I was one of the most negative on housing," Kiesel said in a telephone interview. "I finally came to the conclusion housing is looking pretty decent."
Kiesel said he bought a house in Newport Beach, California, where Pimco is based. Today he published a credit market note titled "Back In" on the firm's website in which he writes, "I'm not sure U.S. housing prices have bottomed -- only time will tell -- but there are many more positives today than there were six years ago when I sold my house."
Home prices that have fallen 35 percent from their mid-2006 peak and mortgage rates of less than 4 percent are helping make it a good time to buy, said Kiesel, who is global head of the corporate bond portfolio management group at Pimco. Other signs the housing market is turning around include foreclosure filings dropping to levels last seen in 2007 and sales of new and existing homes that have begun to increase as rising rents boost the relative affordability of purchasing, he said.
"For those of you renting or on the sidelines, I recommend you at least consider getting 'back in' and buying a house," he wrote in the note. "The future is hard to predict, but U.S. housing is healing and is probably close to a bottom."
'More Light'
Barclays Plc analysts also said today that a housing recovery is emerging. The industry "will contribute modestly to U.S. economic growth in the coming quarters," Vincent Foley, Michael Gapen and Cedric Morris wrote in a note titled "More Light, Less Tunnel."
Economists including Mark Zandi of Moody's Analytics Inc., Bank of America Corp.'s Michelle Meyer, CoreLogic Inc.'s Mark Fleming and Chris Rupkey of Bank of Tokyo-Mitsubishi UFG said last month that housing prices are close to a trough.
Pimco, which oversees the world's largest mutual fund, had $1.77 trillion in assets under management as of March 31. The company's Total Return Fund, which had a record $258.7 billion as of April 30, increased its allocation in mortgages to 53 percent, a 5 percentage point gain, during the first quarter, according to the company's website.
'Had No Idea'
Kiesel declined to disclose details about his new home or how much he paid, except to say it's in Newport Beach, a coastal community about 44 miles (70 kilometers) south of Los Angeles. The purchase price of his new home, which he's moving into next weekend, was about one-third below what he would have paid for it at the top of the market -- about the time he sold his last property in May 2006.