Sam Zell: Why a stock correction could be coming

Billionaire Sam Zell warned on Wednesday the stock market and asset prices at large could be in for a correction. The easy money policies of central banks around the world have pushed up the values of stocks, real estate, art and any hard asset, he said. "When you cut the cost of carrying it, [it] pushes up the price."

On the first day of the second quarter, stocks were trying to get off to a winning start, after the Dow Jones industrial average slipped into negative territory on the last day of March. The S&P 500 index and Nasdaq composite index held on their first quarter gains.

"There's a significant and growing disparity between the stock market and the economy," Zell said on CNBC's "Squawk Box."

"I'm looking for demand, and I find very little of it."

U.S. multinational companies are facing significant competition overseas because the euro and the yen have depreciated dramatically, the real estate mogul said. "They're playing with funny money."

The dollar index, tracking against a basket of six other currencies, rose nearly 9 percent in the the first three months of the year—logging the best quarter since the third quarter of 2008. In the past year, the euro has fallen about 20 percent against the dollar, while the Japanese yen has dropped 15 percent.

Read MoreAfter huge Q1, here's what the dollar will do next

Zell is the founder and chairman of Equity Group Investments, with its origins in real estate. The firm now has interests in energy, logistics, manufacturing, transportation and communications. Current holdings include fixed-income investments in public and private companies.

On real estate, the commercial market has done very well, Zell said, but added that he's not sure the single-family housing market has returned. "I think we're in a major desuburbanization trend in this country. The result is that we're not going to have the high-volume homebuilding that we've had the past, as more people more into the city."

In an earlier "Squawk Box" interview, money manager Bill Smead said he's betting on millennials getting into the housing market. As a result, the CEO and CIO of Smead Capital is bullish on large cap housing stocks.

Read MoreHow to play the millennial spending boom

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