1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies

Buffett warns on real-estate bubble

June 24, 2005

Asked if he thought there are imbalances in the real-estate market and whether that could be dangerous, Buffett said "I think the answer is probably."

Lending practices, low interest rates and herd mentality are "coming together in the real-estate market in a way that would lead me to believe that -- certainly at the high end -- people who buy houses today may have some periods when they regret it," Buffett added.


Rating: 4.0/5 (1 vote)


Buffet_junior - 11 years ago    Report SPAM
Mr. Buffet has made a career out of going against the herd. As usual, he has chosen his words carefully in addressing the Real-Esate Bubble. I feel that the Real-Estate Market has carried the U.S. economy for the past 5 years.

While many major US companies are downsizing, outsourcing, rightsizing, etc....Many Americans have been forced to turn to the equity in their homes to sustain their lifestyles. This borrowed money has allowed Americans to buy cars, take trips, furnish their homes, send their kids to college, pay off debt, etc.

I don't think any of us have to be Warren Buffet to see where this train is headed....What's going to happen in the coming years is more unemployment, more outsourcing of good jobs, the creation of more fast-food and retail-type jobs, leading to increasing mortgage defaults and a flood of Homes on the Market.

All the while, the Federal Reserve will keep raising interest rates in an effort to sustain the diminishing value of the US dollar, while claiming to be trying to keep inflation at bay. This will create a huge opportunity for those individuals with enough cash and credit to capitalize on the Reality Check that's looming over the Real Estate Market.

Please leave your comment:

More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by

User Generated Screeners

Wellrosskeep Single Digit 1 TTM PE and
Wellrosskeep Single Digit TTM PE and L
Wellrossmine 2abc
ttaranto10 Growth 30% Off Hi P/E
jrCannabis Companies
browntroutBV Compounders with Single Dig
browntroutSingle Digit TTM PE and Low BV
NeteaAdi growth screening
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat