If Warren Buffett would buy up a couple hundred thousand single family residential properties, why shouldnâ€™t you? (Or me, for that matter). Check out what heâ€™s got to say about the current market and why real estate investment is the way to go:
Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBCâ€™s â€œSquawk Boxâ€ recently that heâ€™d â€œbuy up a couple hundred thousandâ€ single-family homes if it was practical.
Buffett said thatâ€™s because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now.
â€œHousing will come back, you can be sure of that,â€ Buffett wrote in his annual letter to shareholders recently.
Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon.
â€œPeople may postpone hitching up during uncertain times, but eventually hormones take over. And while â€˜doubling-upâ€ may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure,â€ Buffett said.
Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be â€œdead wrong.â€
Source: â€œHousing Market Forecast Beyond 2012 From Warren Buffet,â€ International Business Times (Feb. 28, 2012) and â€œWarren Buffet on CNBC: Iâ€™d Buy Up â€˜A Couple Hundred Thousandâ€™ Single-Family Homes If I Could,â€ CNBC (Feb. 27, 2012)