Warren Buffett was on CNBC this week and noted that his prediction that the housing market would turn by the end of 2011 was wrong. However, he did go on to say that household formation in the United States continues at a pace above the increase in housing supply and eventually demand will absorb excess supply.
While the exact timing is hard to predict, we are getting closer everyday to stability. On a positive note, he reported that all of Berkshire Hathaway’s businesses will have record earnings this year except those related to housing. That represents a very diverse group of companies.
As noted in other blog posts, I feel the in-town markets and suburban neighborhoods with the best school systems have stabilized and are showing early signs of growth. It’s hard to call a bottom, but my recommendation to anyone waiting for the “right time to buy” is, “You better start looking”.
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