Tag Archives: Berkshire Hathaway

Buffett Makes a big bet on the Housing Recovery — PragCap

Buffett Makes a big bet on the Housing Recovery

Warren Buffett has slowly been turning more constructive on US housing and now there are reports that he is putting his money where his mouth is.  Buffet is making a big bet on housing according to Bloomberg:

Berkshire’s HomeServices of America Inc. unit will be the majority owner of the venture to manage a U.S. residential real- estate affiliate network, according to a statement on the new company’s website. The firms plan to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. Brookfield’s network has operated under the Prudential Real Estate and Real Living Real Estate brands.

Berkshire’s managers have been positioning the firm to benefit as the U.S. home market recovers from its worst slump in seven decades. The Omaha, Nebraska-based company has bought a brickmaker, won the loan portfolio of bankrupt mortgage lender Residential Capital LLC at auction and built its HomeServices unit by agreeing to acquire real-estate brokerages in states including Oregon and Connecticut.

Buffett, 82, said in July that the U.S. home market was beginning to improve. Berkshire’s billionaire chairman and CEO tracks economic activity, in part, by studying the results of the company’s more than 70 operating businesses including ones that build manufactured homes, make paint and sell insulation.

“It was just a question of getting households in balance with” the supply of homes, Buffett told Bloomberg Television’s Betty Liu in a July 13 interview. “That happens in different paces in different parts of the country, but you have seen a much better balance developing here in recent months. And that’s why you’re seeing some pickup in prices in places.”

1 Comment

Filed under Housing

Buffett: US Housing Picking Up, Rest of economy slowing down

Buffett: US Housing Picking Up, Rest of economy slowing down

by Bill McBride on 7/12/2012  

From CNBC: Warren Buffett: US Economic Growth Slowing, Europe Slipping ‘Pretty Fast’

In a live CNBC interview from Sun Valley with Becky Quick of “Squawk Box,” Buffett says the general economy’s growth has “tempered down” so that it is now “more or less flat.”

He does, however, see a “noticeable” pickup for residential housing from a “very low base” that “doesn’t amount to a whole lot yet, but it’s getting better.”

For months, Buffett had been seeing general U.S. economic growth held back by a weak residential housing market.

Buffett also says things are beginning to “slip pretty fast” in Europe, especially over the past six weeks.

Warren Buffett (my transcript):

“I have a different story this time. For a couple of years, I’ve been telling you that everything except residential housing was improving at a moderate rate, not crawling, but not galloping either. But that residential housing was flat lining.

The last two months have been sort of the opposite. The general economy in the US has been more or less flat; the growth has tempered down. But residential housing – we’re seeing a pickup – it is noticeable, it is from a very low base, and it doesn’t amount to a whole lot yet – but it is getting better. You have a flip-flop on that.”

The rest of the economy is slowing down – it is not heading downward – but it is not growing at the rate that it was earlier.”

His comments on Europe were very negative.

Leave a comment

Filed under Housing