Residential real estate to recover within year, Zell says

The residential sector has bottomed out and the sector will recover within the year, Sam Zell, founder and chairman of Equity Group Investments told CNBC. He also said the impending commercial market fallout will follow the pattern of the broader economy. “You have to look at the big picture,” he said. “If the overall economy recovers, there will be a demand for more high-class office space and high quality retail space,” Zell said. In comparing the residential and commercial markets, he said the problems in the residential sector were greater because they were caused by fraud. “People were creating mortgages, brokers were twisting arms, and we are beginning to see proof of that,” he said.