Buffett added to holdings of Wells Fargo & Co., bought real-estate brokers and bid on mortgage assets of bankrupt Residential Capital LLC as he bets on a rebound in housing.
“For the last two years, I’ve seen everything except housing moving forward in the economy,” Buffett, 81, told Betty Liu in a July 13 interview on Bloomberg Television. “In the last few months, the rest of the economy actually has flattened out. Housing is picking up.”
The number of available U.S. homes has been declining, a trend Buffett has said was inevitable as new households form. Properties for sale fell to 2.39 million in June from an average supply of 2.93 million in 2011 and 3.22 million in 2010, data from the National Association of Realtors show.
“Buffett has spent the past decade amassing a portfolio of companies that are involved with home remodeling,” he said in a phone interview. “It’s got the right drivers if this housing trend continues.”
Berkshire’s subsidiaries include Acme Brick Co., paint maker Benjamin Moore & Co., builder Clayton Homes and carpet manufacturer Shaw Industries. The firm has stakes in some of the country’s largest mortgage lenders, including U.S. Bancorp and Bank of America Corp. The Wells Fargo stake was valued at more than $13 billion at the end of March, making it the second- biggest holding in the company’s stock portfolio.
So…in the past week, The Donald AND Warren Buffett have both publicly commented that housing is a good investment right now. But I still believe that we have some further depreciation ahead of us and that it is good time to buy ONLY if you have a certain narrow set of goals and meet specific criteria. When I meet with a client who expresses an interest in buying a home or investment property, our initial meeting involves a detailed analysis of whether or not they really should be buying. Not that I think I am smarter the The Donald or Warren Buffett..but even though prices are down over 50% from their highs and interest rates are at historic lows…waiting may still be the right decision.
Thanks again for reading…Steve Jackson
561.602.1258
