The light at the end of tunnel is NOT a freight train coming our way – that beast has already been and gone, at least according to billionaire investor Warren Buffett, who thinks the residential real estate slump will be over by the end of next year. He predicts that’s how long it will take for demand to catch up with supply.
The recent plummet in home values has left 20% of all U.S. mortgage holders owing more than what their house in worth, causing some pundits to liken the present economic devastation to the Great Depression. Real estate investors who have been following Empowered Investor Network strategies when picking properties have weathered the storm better than most but who can blame residential investor or home owner for being skittish about when it’s all going to end?
If Mr. Buffett’s opinion means anything, sunnier days are on the horizon. Buffett has a particular interest in real estate since part of his company Berkshire Hathaway includes a real estate brokerage that builds pre-fab homes. But it’s not all wine and roses. Higher value homes and areas where overbuilding ran rampant in the run up to the slump will not likely recover next year. For these problem areas, it will be a while longer.
The Creating Wealth Team
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