Warren Buffett: Housing Crisis Will End

February 27, 2011

One of America’s richest men says that owning real estate is worth it.

Warren Buffett on Saturday released his annual letter to the shareholders of his company, Berkshire Hathaway Inc., with a lot of optimism toward the future.

Buffett, Berkshire’s chairman and CEO, believes in the housing industry.

Buffett's Omaha home: A great investment.

“A housing recovery will probably begin within a year or so,” Buffett wrote. “In any event, it is certain to occur at some point.

“Home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates.

“For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come.”

Buffett’s house, located in Omaha, Nebraska, is currently worth about $660,000.

“But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender — often protected by a government guarantee — facilitates his fantasy,” wrote Buffett. “Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.”

Buffett, 80, referenced Berkshire’s Tennessee-based Clayton Homes, which builds, sells, finances, leases and insures manufactured and modular homes. Buffett says Clayton Homes was able to avoid the housing crisis.

Warren Buffett

“If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did,” Buffett wrote. “Our approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income. This policy kept Clayton solvent and also kept buyers in their homes.”

The billionaire investor’s letter to his shareholders, which included good business, management and investing tips, had an overall optimistic viewpoint of our nation.

“Commentators today often talk of ‘great uncertainty.’ But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.

“Don’t let that reality spook you,” Buffett wrote. “Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.

“The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential — a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War — remains alive and effective.”

Buffett is so influential in our society that his positive words could quite possibly jump-start our economy.

According to him, it’s only a matter of time.

“America’s best days lie ahead.”

Warren, we can only hope you are right.

Want to read Warren Buffett’s letter? Click here!

Categories: Economy, Education, Featured

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Read All Stories By Tracey



Your right. Sometimes it pays to listen to those who produce in society.


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i recently came across this book which describe how warren buffett invest in real estate, very informative.

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