I went to Raleigh this week to attend a meeting of the board of the NC Association of Realtors. During our session, the current NCAR President, Lou Baldwin, made the observation that earlier in the year, billionaire Warren Buffett made a comment that got everyone’s attention. While being interviewed on CNBC in late February, he said that he’d buy up a couple hundred thousand single family homes if it were practical for him to do so. He went on to say, ”If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks.” If you’d like to see the report on the interview, go HERE.
From this, I still don’t advocate owning your primary home mainly as an investment. You should own a home because you want the freedom to do what you choose on your property and you’d prefer to not pay rent that retains no equity in the property. However, Buffett’s comments do suggest that he sees a clear path to improvement in the housing market in terms of valuations and prices. The only question is how long that will take. With interest rates and prices being at historically low levels, anyone who is contemplating a move should be looking seriously at getting it done, provided you have a reasonable credit history and stable employment.
In another interview, Buffett also said that people should not try to buy the home of their dreams. Rather, they should aim to buy the home they can afford. Seems like Mr. Buffett’s logic always rings true to practical thinking. That’s why I enjoy reading about his pronouncements.