Buffett — The Economy and the U.S. Housing Market’s Future
“There hasn’t been a big pickup in the housing market. That’s the best news you can have.
“If you have too many houses in relation to households you want to stop creating houses for awhile. If you have an excess inventory of purple dresses at the end of the fashion season, you mark them down.
“Households do grow in this country. We were building 2 million residential units a year while creating 1.2 million households. The worst thing in the world now, in my view, would be some crazy artificial program to go to 1 million, 1.5 million housing starts.
“Except maybe at the high end and a few other spots with oversupply, you’ll have a pretty good balance within a year.
“(Berkshire Hathaway’s) housing related businesses … their earnings are very poor right now but that doesn’t bother me at all. What would really bother me is if we tried to over-stimulate (the housing market) again. We’ve got a country that’s going to create more households and we will get a balance if we don’t build too many.
“You won’t see some boom in housing prices. You won’t see a further (drop in value). Pretty significant improvement in the industrial sector. Luxury goods we’re seeing a bounce but from very low levels.”
(From a May 2, 2010 Press Conference the day following the Berkshire Hathaway Shareholders Meeting.)
Filed under: Warren Buffett
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