Zell: "We are in a confidence crunch."

Sam Zell, one of the most well-known real estate investors in the country, spoke at a recent conference and says what we're going through is not a credit crunch, but what he calls a "confidence crunch."

"We're not really in a quote 'credit crunch.' I think what we are in is a 'confidence crunch,'" said Zell, funder of the Samuel Zell and Robert Lurie Real Estate Center at Wharton. "I would argue the excess liquidity that existed eight weeks ago still exists today. It has a different risk premium on it, but the actual amount of liquidity has not changed."

Zell said the slump should come as no surprise: "Over the last three years people were flippant. They bought anything they wanted and were proud that they didn't do due diligence. I think they have all been chagrined and are scared out of their minds."

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