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)