Buffett: Sustainable housing rebound within year

OMAHA, Neb. | Sun May 2, 2010 5:34pm EDT

OMAHA, Neb. May 2 (Reuters) - Warren Buffett on Sunday said he expects to see a "sustainable recovery" in the U.S. housing market within one year, provided that policymakers do not try to artificially stimulate sales activity and create an oversupply of available homes.

"The worst thing in the world is if you had some crazy artificial program" to spur residential starts, "or we'd have this overhang for a while," Buffett said at a press conference. "I want to have a sustainable recovery, and I don't think you're going to have to wait more than a year for that."

Berkshire Hathaway Inc (BRKa.N) (BRKb.N), which Buffett runs, has several housing-related units, and Buffett said two in particular, Acme Brick and insulation maker Johns Manville, have "very poor" earnings now.

"That doesn't bother me at all," he said. "What would bother me is if we were to overstimulate them, and create a permanent overhang" over the housing market.

Buffett also said Berkshire is seeing "pretty significant improvement" in its industrial units, such as Marmon Holdings Inc and Iscar Metalworking Cos, while luxury goods units Borsheim's Fine Jewelry and plane leasing unit NetJets Inc are seeing "a bounce, but from a very, very low level." (Reporting by Svea Herbst-Bayliss and Jonathan Stempel, editing by Martin Golan)

Stocks
Regulatory News
Bonds News
Bonds
Markets

Related Quotes and News

Company
Price
Related News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
GreenMan1 wrote:
I’ve read where Buffett’s investment in Clayton Homes’ iHouse division has done so poorly that they’ve re-designed an introduced a cheaper eHouse version. So, now where does Buffett think that affordable “green” manufactured housing is going given the huge unsold home overhang that is still pushing prices downward in many markets? And where is our green, affordable, manufactured solar home of the future? Why aren’t we innovating around the rising cost, soaring demand and challenging supply of fossil fuels when we’ve learned so much about passive & active solar and other alternative sources?

May 02, 2010 6:32pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.
See All Comments »