Posts Tagged ‘Warren Buffet’

Buffet Ready For the Next Housing and Mortgage Trend

August 2, 2012 Leave a comment
— Photo Courtesy of —

The U.S. housing market has seen four years of  lack of new homes.  Since 2008 new homes construction declined  steadily and it was  only up until this  past June 2012 we began to see reports of  new housing  construction applications  increase.

Four years of lack of  new homes coupled with the shadow and REO  inventory held by the banks  and the  foreclosure homes many stuck in limbo because of the robo signing issues only recently starting to move again;   the  shortage of  available housing has been substantial.

These issue skew the reports of increase of home prices as a barometer for uptrend in the housing market. The demand for homes because of loss of inventory  may not reflect as much of an  uptrend in   the housing market, rather  leaning more towards  competitive bidding  for the minimum inventory on market.

What  may be  added  to that demand is  the normal new   families demographic  but those numbers are balanced out by the number of young adults remaining at home because of the unemployment.  When the unemployment numbers decrease there will added factor in housing demand.

Warren Buffet’s Berkshire Hathaways   increased his holdings in Wells Fargo, the largest U.S. Homelender, and the assets of the bankrupt Residential Captial LLC.

A turn in the housing market will benefit Berkshire’s businesses tied to home building and repair, said Josh Brown, who helps oversee $350 million at Fusion Analytics Investment Partners LLC in New York, including Berkshire shares.

“Buffett has spent the past decade amassing a portfolio of companies that are involved with home remodeling,” he said in a phone interview. “It’s got the right drivers if this housing trend continues.”

Berkshire Hathaway  has added approximately 36% or  104.1 million shares of Wells Fargo to its portfolio since  2008-2009.   And his choice in a regional bank is a less riskier  one  with current big bank problems.

“Wells is seen as a supersize regional bank,” reports Wall Street Journal.”More telling, it isn’t a player in over-the-counter derivatives markets. Wells had derivatives with a face value of about $3.2 trillion at the end of last year. J.P. Morgan had $71 trillion and BofA, $68 trillion.”

When the real estate market is back on the move Warren Buffet will in the right position, again.



Investing in Real Estate

Home Buying Kit For Dummies

Cash Flow Notes 2012