He's very bullish on housing. He said he would buy millions of distressed rentals if he could. He cited prices and interest rates.
Proof is in the pudding. If this were really true, then why is he not buying millions of rentals, he surely "has the ability to" so what gives with the "he would if he could"?
There is no question that RE is on sale all across the country and that mortgage rates are the lowest they have ever been. The problem still remains that it is so difficult to qualify for a mortgage. Until that loosens up, the market will continue to stay flat or decline. It is a simple supply and demand factor and right now, supply is higher than actual demand (buyers who are already qualified for a loan and looking to buy)
Buffet will instead negotiate some great preferred share deals on some more public real estate companies like TOL instead or takeover some new ones. Much less hassle for him and Berkshire. Berkshire already has interest in a few so there is his agenda.
From Forbes today:
Perhaps the biggest error on Buffett’s part over the past year, however, has been his persistent optimism towards the housing market. In this year’s letter, the investor offered a mea culpa, noting that, while he expected the residential real estate market to claw back in a year or so, this forecast was “dead wrong.”
With companies like Clayton Homes, Acme Brick, and Johns Manville listed under the Berkshire Hathaway umbrella, it is no wonder that Buffett is anxious to see the housing market snap back. In addition to helping his own company, the investor has proclaimed on a number of occasions that he feels this sector is one of the biggest weights on the nation’s recovery picture.
His timeframe may have been off, but the investor is far from ready to give up on the U.S. housing market. On the contrary, in an interview with CNBC at the start of the week, the Nebraska native looked favorably towards the sector, admitting that, given the current low rates, he would be buying single-family homes if he was able to.
I don't understand why some of you think swaying sponsors, influencers, and decision makers is wrong. Business people (and sales people) should be doing this every day.
To an extent, yes, but when it involves what I would consider "insider trading" (even though it is not) and with the use of public tax dollars, that is when I really have a problem with it. If he wants to influence some companies to do somthing all the while he holds shares in teh company, fine. But if that influence stems from that same company receiving tax dollars from US tax payers, now we have an issue!
@Peter S - Again, this just shows he is pulling for RE to improve publically because he has financial interests in companies involved in RE.
No different than if I was invested in Pepsi and had the pull to go on TV and tell everyone that they should be drinink Pepsi because it is so much better than Coke.
@Peter S - Again, this just shows he is pulling for RE to improve publically because he has financial interests in companies involved in RE.
No different than if I was invested in Pepsi and had the pull to go on TV and tell everyone that they should be drinink Pepsi because it is so much better than Coke.
Good point Will. Likewise, the reason people NEED to stock up on precious metals NOW is not because I have been long a few years and wish to exit soon; the reason people NEED to invest heavily in PMs now is that the whole world is going collapse any SECOND!
Will - Yeah, I have a problem with him steering tax dollars his way as well. Got a hand it to the guy though...he's playing in a whole different league.