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Warren Buffett: There is No Housing Bubble


With home prices expected to appreciate by over 5% this year, some are beginning to worry about a new housing bubble forming. Warren Buffet addressed this issue last week in an article by Fortune Magazine. He simply explained:

“I don’t see a nationwide bubble in real estate right now at all.”

Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:

“I don’t think we will have a repeat of that.”

What factors are driving home prices up?

It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. According to a recent survey of agents by the National Association of Realtors(NAR), buyer traffic was seen as either “strong” or “very strong” in 44 of the 50 states (the exceptions being: Alaska, Wyoming, North Dakota, West Virginia, Connecticut and Delaware).

Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.

What does the future bring?

As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels.

Anand Nallathambi, President & CEO of CoreLogicrecently addressed the issue:

“Home price gains have clearly been a driving force in building positive equity for homeowners. Longer term, we anticipate a better balance of supply and demand in many markets which will help sustain healthy & affordable home values into the future.”


5 Comments on “Warren Buffett: There is No Housing Bubble”

    Debbie Albert

    This reflects our market situation on Florida’s Treasure Coast. Multiple offers are common and it is important that buyers come prepared with their earnest money and loan approval or proof of funds

    Nelene Gibbs

    We are seeing multiple offers and a shortage of inventory in the Hampton Roads housing market which includes Virginia Beach, Chesapeake, Norfolk, Portsmouth, and Suffolk, Virginia. Prices continue to appreciate and new construction is seeing an upturn in our market.

    Deidre Parker

    Central Indiana homes have been getting multiple offers in 24-48 hours, calling for highest and best by 72 hours, and we are selling homes over asking price left and right. Buyers need to be shopping below their approval amount just in case, and they need to be submitting a copy of earnest money and pre-approval with their offer. Also, even though your offer may be the highest, it may not be the best. When we ask for highest and best, a cash or conventional loan are considered to be the “best” types of financing by sellers because of less red tape.

    Teri Splettstoesser

    In Huntington Beach zip code 92648 prices are up over 11%!!! The buyers we see are solid, they easily qualify for the loans they are getting. That is not what I remember from the years of the housing bubble.
    Teri Splettstoesser
    SeaCliff Realty HB CA

    Kelly Yarberry

    Here in Houston, TX, it’s the same way! Multiple offers coming in, and several sellers have to stop accepting them within 72 hours of the houses going on the MLS, simply because it becomes overwhelming for them.

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