Warren Buffet worried about housing, should we be too?

By
Real Estate Broker/Owner with Apex CRE SA649708000
https://activerain.com/droplet/4gj7

Ok, so we all know him as one of America's greatest investors, actually, I consider him one of the smartest investors, with some unbelievable foresight about what's around the corner in terms of economics, Warren Buffett just gave his 2 cents about housing.  He seems to be confused about the housing market or more importantly sheepish.  OK I'll say it, "I've been saying for a long time, this is a depression we're in, and there will be another major crash in the Real Estate industry."  Now don't get me wrong I'm a "glass half full guy," but, with quantitative easing (printing and pumping money into the economy) still going on since 08 at $85B a month (that's 1 trillion a year), something's gotta give, remember we have to suck all that printed money back into the Fed at some point (and there's only one way to do that......raise interest rates).  This house of cards will come crashing down.  According to Warren Buffett "Housing is not that strong yet, and I'm surprised at that."  You can read his entire interview here.Warren Buffett

Pending home sales were 8% lower in March than the same time last year according to NAR.  Again according to Buffett, "Long term my signals are mixed, I really can't advocate a position to a long-term investor."  We're not out of the woods yet folks, far from it, be cognizant and be a realist, the reason I think so many of us are wondering why it seems to be good then really bad for us in the industry is buyers and sellers are dipping their toes in the pool, instead of jumping right in, hence why it seems like feast or famine at times.  It isn't us Realtors, its the US economy as a whole (how many of you have reassessed your marketing, SEO, CRM and scratched your head saying "What the heck?").  Remember last quarter the economy grew a whopping 0.1% and that's called life support. It isn't us guys, it's the rest of the economy, and you wanna be in Real Estate huh?

Alex Popovic is the founder of Semper Find My Home and is an OIF/OEF veteran Force Reconnaissance Marine Scout/Sniper.  Don't let this happen to you

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Alex Popovic Real Estate Agent Phoenix, AZ (602) 290-4266

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  1. Bob Crane 05/10/2014 09:58 PM
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Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

John,

Great points and very poignant view,  hope you crush it out there

May 05, 2014 11:21 PM #41
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Sharon,

Faux is very applicable, I think it's the proverbial 800 lbs elephant in the room and alot of burying heads in sand

May 05, 2014 11:22 PM #42
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Jan,

Hey my fellow Scottsdale realtor, how are you?  Buffett seems to be saying many things and his actions seem to be doing the complete opposite, who knows right?

May 05, 2014 11:24 PM #43
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Bob,

Exactly my friend, a house of cards it is

May 05, 2014 11:24 PM #44
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Anna,

Caution and having a plan with multiple back up plans is warranted, it all starts with a business plan and over 98% of agents don't have one, so what does that tell you?

May 05, 2014 11:25 PM #45
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Joe,

Your point is well recieved and lots of people are harking the same message, I find it ironic that he said this about RE, then went and purchased Prudential and immersed himself in the deep end of the industry.  Interesting!  Thanks for reading, visiting and commenting

May 05, 2014 11:27 PM #46
Rainer
455,919
John Dotson
Preferred Properties of Highlands, Inc. - Highlands, NC - Highlands, NC
The experience to get you to the other side!

Alex, sometimes I think Mr. Buffett is just wrong - of course he didn't get where he is by being wrong to often!

As far as his housing outlook, I think he is dead-on.  What we are feeding on right now is just a sugary coating to a nasty and toxic dessert.

May 06, 2014 12:24 AM #47
Rainmaker
120,864
Tessa Skeens
Hampton ReDesign, Home Staging and Redesign - Grand Junction, CO
Staging For Realtors, Builders & Investors

I agree with the consensus that Berkshire Hathaway has been investing in the "home" market either through real estate acquisitions, furniture rental companies (CORT) and others. It would be really interesting to go back and look at what he and others forecast would happen in 2013-14. Are his predictions always successful?

I believe we have to act from positive expectations not fear. Fear has a way of skewing the outcome to produce what is feared.

May 06, 2014 12:43 AM #54
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

John,

Well put, I agree we're eating what we think is a cure, but the really bad stuff is still forthcoming.

May 06, 2014 12:44 AM #55
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Tessa,

Thanks for visiting, commenting and reading, I don't operate via fear, nor to I try to instill it by blogging.  I operate in the realm of realism, indicators, trends, and I take into account what all successful business people say and formulate a plan for me and my business.  With that I have a PACE plan, just like they taught us in Special Operations.  Primary, Alternate, Contingency and Emergency Plans.  Have a great day, hope you crush it out there Denver.

May 06, 2014 12:47 AM #56
Rainmaker
472,899
Sondra Meyer:
Star View Real Estate - Colorado Springs, CO
See It. Experience It. Live It.

Alex, having a PACE plan sounds like a great strategy.  I need to incorporate that into may business model.  

May 06, 2014 02:15 AM #57
Rainer
19,622
Jennifer Hamilton
Keller Williams Seattle Metro West - Seattle, WA
Jennifer Hamilton

"It's the jobs, stupid"....no seriously.

Unless/until we realize that our industry relies upon a healthy middle class, we will continue to see these "fits and starts". We have got to adjust minimum wages to reflect inflation, or the middle class is going to continue to disappear....thus, no move-up buyers, or first time home buyers. It's going to go backwards to a feudal society with a few landlords and many peasants living at their mercy.

I've worked predominantly with first time home buyers these past 8 years--I can tell you...they are few and far between this year. Most disturbing. I am truly concerned for our industry.

May 06, 2014 07:42 AM #58
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Sondra,

Thanks for reading, yes PACE plans are part of my business plan and ingrained in me thanks to my time in the military.  Think of it this way.....everything you do has a PACE plan

May 06, 2014 10:45 PM #59
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Jennifer,

Point taken, and sarcasm too.....as one of the major lynch pins of the US economy we are definitely a major part of this economic recovery, so we get to feel first hand what's going on out there.  I agree.....scary times, as I said, we will have another crash before we get out of this depression

May 06, 2014 10:47 PM #60
Rainmaker
814,296
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Alex - I'm not sure what the answer is, but our economy does seem to continue to spend more than it earns. Also, so many mixed signals about what the economy is doing, it is difficult to know where the real estate industry is going. Higher interest rates will only cause more damage to the already fragile economy. I'm not sure what the future will hold.

May 12, 2014 07:57 AM #61
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Troy,

Thanks for reading and commenting, I'm with you, I'm not sure what the future holds, but I feel it's as though we can see it coming and can't do anyting and we're stuck in our tracks.  It's kinda frustrating.

May 12, 2014 09:06 AM #62
Ambassador
686,382
John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
Crest Backyard Homes "ADU" dealer & Contractor

This has been a very good conversation with a lot of very astute contributors. Are we almost realizing some sort of consensus?

May 13, 2014 02:40 AM #63
Ambassador
3,985,084
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Alex, March was about the same as April here in Clarksville. Our market seems to be rocking right along, not gangbusters but doing okay.

May 13, 2014 10:47 PM #64
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

John,

I agree, it's been a great discussion piece

May 14, 2014 03:36 AM #65
Rainer
92,057
Alex Popovic
Apex CRE - Phoenix, AZ
Alex Popovic Designated Broker Commercial RE

Debbie,

I think that's how it is in "most" places around the US, sure there are some great places doing gangbusters, but for the most part it's very, very fickle

May 14, 2014 03:37 AM #66
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Rainer
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Alex Popovic

Alex Popovic Designated Broker Commercial RE
Alex, Phoenix is huge can you help us find a place
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