Warren Buffet, billionaire investor extraordinaire and CEO of Berkshire Hathaway received a lot of slack given his predictions last year that a housing recovery would turn around in a years time. He admitted he was “dead wrong” with those comments but is still a fan of the investment potential within residential real estate. He believes that purchasing a home with an “ultra-low” mortgage rate and keeping it as part of a portfolio for the long term has become a better investment than stocks at this time. He perceives that there is a pent up demand in the housing industry as the economic uncertainly of the past few years have forced many couples to move in with family or in-laws. This temporary solution is exactly where Buffet views the source of demand. The association between motivated buyers eager to move on with their independent lives, available inventory and low mortgage rates is what drew Buffet to comment on CNBC’s Squawk Box that he’d “buy up a couple hundred thousand” single-family homes if it was practical.
The oracle has spoken… I hope your listening.