Expert on Housing
Has Her Own Nest
by Michael Corkery
From The Wall Street Journal Online
September 14, 2007
Ivy Zelman, the former housing analyst at Credit Suisse who warned about trouble in the housing market months before the downturn, has started her own housing-related research firm geared toward institutional investors such as hedge funds, mutual funds and banks.
Ms. Zelman says her new firm, Zelman & Associates, will assess the risk of bankruptcies in the housing industry, examine the turmoil in the mortgage market and dispense research about the housing downturn's broader impact on the economy and consumer spending.
"This recession in housing is more severe than the 1990 and 1991 downturn," Ms. Zelman said in an interview. "It could have a much broader impact on the economy than people realize, and it will be longer in duration."
Ms. Zelman, 41 years old, says proposals to bail out struggling homeowners might help, but "I don't think it will do enough to forestall the inevitable: that the consumer is going to roll over."
Didn't Drink the Kool-Aid
Ms. Zelman was one of the first Wall Street analysts to warn about issues that could sink the housing industry, such as a flood of speculators buying new homes, an oversupply of land and problems posed by subprime mortgages. She questioned bullish home builders, who believed home sales would keep booming, and asked one chief executive during a conference call last December, "I am wondering which Kool-Aid you're drinking?"
Ms. Zelman was ranked the top home-builder analyst in The Wall Street Journal's 2006 "Best on the Street" analyst survey. Before Credit Suisse, she worked at Salomon Brothers (now part of Citigroup Inc.), first in investment banking and later as equity analyst, focusing on housing.
The Fed's Ear
At Credit Suisse, Ms. Zelman focused primarily on the home builders and building-product companies, and her research was sought after by everyone from private-equity firms to Federal Reserve officials.
She says working as an independent researcher and analyst "gives me an opportunity to be more creative, and hopefully it will be more lucrative."
Ms. Zelman will be based in Cleveland, while the rest of her firm, which includes several associates from her former housing team at Credit Suisse, will be located in New York.
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