Warren Buffet thinks the real estate market will recover in a sustainable way in a year or so. That is, if the politicians can stop trying to fix the market.
I am glad to see that Warren and I agree on this.
My fear, watching the real estate market for the past 3 years, has not been the downturn, that was coming and there has been nothing we can do about it, but that we keep intervening in the marketplace with programs that will stop the bleeding without helping the patient.
We have needed a bottom so that buyers feel confident they will make money on their homes.
All of these governmental programs have helped sell some houses today and gotten some folks off the fence, but they have not created a solid market for homebuyers to feel comfortable in.
They have extended the pain in the housing industry and prolonged the downturn. And these fixes have come from both sides of the aisle in Washington, so I am not casting blame at the current White House.
The market is near the bottom, let’s all stand back and let that bottom firm up. Let buyers get comfortable they will never get a better price. Let sellers know that there is not another program on the horizon to eek out a few more thousands of dollars. Let those who should not be in the homes get out gracefully but quickly.
And let’s get the real estate market to a place it can recover. They have not listened to me on this topic. Maybe they will listen to Warren Buffet.
The worst thing in the world is if you had some crazy artificial program” to spur residential starts, “or we’d have this overhang for a while,” Buffett said at a press conference. “I want to have a sustainable recovery, and I don’t think you’re going to have to wait more than a year for that.”
Berkshire Hathaway Inc (BRKa.N) (BRKb.N), which Buffett runs, has several housing-related units, and Buffett said two in particular, Acme Brick and insulation maker Johns Manville, have “very poor” earnings now.
“That doesn’t bother me at all,” he said. “What would bother me is if we were to overstimulate them, and create a permanent overhang” over the housing market. via Reuters
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I share your view on what has been frightful and disconcerning over the last three years. So glad that you and Warren are on the same page as far as what the future will bring!
I don't care what Buffett says (http://www.socialnews.biz/tag/Warren%2BBuffett). He is always talking his own book as they say. The real problem is having housing loans with little or no equity on a non-recourse basis. Only until they get back to sound lending practices will the housing market be healthy in the long run. They are not going to do that so we might get a bump again for a bit until the ponzi falls apart.
The real solution!
Lowering the interest rates of people facing forclosures through a simple streamline process will keep the glut of forclosures off the market. People who are facing forclosure have already ruined their credit and have no place to go. Making their payments affordable will only keep forclosures from ruining neighboring property values and taxable values for municipalities. If you dont know what is really going on then do not comment because you only make matters worse
Paul Lyons