For the vast majority of Americans who just skim the real estate headlines, a quote from Warren Buffett should keep the party rolling. But does he qualify as a cheerleader now that he owns one of the biggest realtor companies? And this photo they used – is that a perp walk?
http://fortune.com/2016/04/30/warren-buffett-there-is-no-bubble-in-real-estate/
An excerpt:
Warren Buffett says now is a good time to buy a house, though not as good as it was four years ago. Still, Buffett says he thinks the chances of housing prices collapsing are very low.
“I don’t see a nationwide bubble in real estate right now at all,” says Buffett.
Buffett made remarks at the annual meeting Berkshire Hathaway, which took place on Saturday in Omaha. “In Omaha and other parts of the country people are not paying bubble prices for real estate,” says Buffett.
Earlier in the day in response to a question about banks, Buffett said he did think derivatives are a “ticking time bomb.” But when it comes to housing and mortgage loans, Buffett said, while real estate was certainly a problem in 2008, he didn’t think that would be the source of the next problem for the financial system. “I don’t think we will have a repeat of that,” says Buffett.
He made a couple of other comments as well…
Warren Buffett says he doesn’t think a nationwide bubble in real-estate prices has developed, but that real estate isn’t as attractive of an investment as it was a few years ago.
Translation…
The real estate market is going to stagnate at higher prices.
Buffett told shareholders at the Berkshire Hathaway annual meeting that he thinks many real estate markets, such as his hometown of Omaha, Nebraska, continue to offer sensible prices.
Translation…
There’s plenty of places in the US you can move to that are still considered affordable.
Buffett says he doesn’t think real estate will be the source of broad economic problems the next time the U.S. economy is in trouble.
Translation…
The banks, government, and the fed will always bail each other out. They’ve figured out that collusion works.
But he says the current low interest rates may be encouraging people to buy homes at elevated prices they may eventually lose money on.
Translation…
Many people in “expensive” markets are paying too much for their house which they will lose money on (or barely break even) when try try to sell.