Warren Buffett has always been an interesting man. He’s been wildly successful in the business of investing, yet he seems to be someone with whom you’d feel comfortable having a leisurely chat over coffee. He just not full of himself like many very successful people. Bill Gates even pals around with him, the better to learn the ways of the business world and how best to manage great wealth.
So when Warren Buffett speaks, I tend to listen. The blog, Everything Warren Buffett (who knew such a thing existed?), reports that Mr. Buffett recently published his annual letter to shareholders of his company, Berkshire Hathaway, in which he predicted the virtual end of most of our major housing problems in 2011. Mr. Buffett said, “within a year or so residential housing problems should largely be behind us, the exceptions being only high-value houses and those in certain localities where overbuilding was particularly egregious. Prices will remain far below “bubble” levels, of course, but for every seller (or lender) hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means because the bubble burst.”
For those looking for hope of positive things in our future, this is pretty good stuff. The health of the economy is dependent on jobs, but so many jobs are related to housing. If the eventual reduction in the inventory of housing means the housing market will improve, that should in-turn bring better news on job creation which will then further feed the housing market.
This is complicated stuff, but I’ve got confidence that Mr. Buffett has a pretty good grasp on things.
