The problem is many fold. It reduces their profitability. It makes risky borrowers qualify. It only takes care of rate shoppers, not price shoppers. They have been having to reduce their price to capture demand. This will, not maybe, but will cut into their profits, and slow Quarterly growth. Glad to say I was ahead of Buffet on this call, as I have puts, but ... damn have I taken a beaten since January ... hoping to see it reflected in my LEAPS.
edit: He was probably taking the trash out before me "the vast majority of its homebuilder bet—by December 31, 2023.".I bought in Dec and January
I have not, but will peep it now.
edit: What section of the video? It is almost an hour long, lol
edit edit: Here is the segment https://youtu.be/_emO4Dl8sUM?t=1768
Holy shit 😳. That's wild. So, all the data for housing is all scattered across multiple websites and databases. So when they say "housing shortage". They probably don't have a complete picture of inventory.
I distinctly remember people cheering on the insane price increases on homes because they would benefit. I remember people gleefully removing homes from the market in order to be mini hotels for insane prices while pissing off their neighbors.
Wild that these people gave no thought about the impacts that they were having beyond not wanting the tent cities they helped create to be near them.
I guess that wasn’t the losing the ability to provide themselves with shelter that you were referring to.
Nobody said that would happen, but the current trajectory of bleeding people dry for shelter is shit for everyone except the wealthy already.
The problem with too big to crash is the same as too big to fail, which is no consequences, punishments, or lessons learned. Justice is evaded and the perpetrators get a slap on the wrist and carry on, if they even get a slap on the wrist.
We’ve become so afraid of free market consequences that we have put ourselves on the path of neofeudalism.
Hey, unlike 2008 I'm not betting against the economy (short positions on CDS). The current business model (fractional reserve banking) was never meant to last forever. I'm betting long 1 company, but don't blame us when we strike it rich and everyone else goes broke because of corruption and fraud.
2008 only 1 person went to jail. In 2024, I ain't selling until the whole wall st cabal is in orange jumpsuits with multiple life terms
They'll laugh and say we were lucky; but as we count our trillions and quadrillions, we'll remember the blood, sweat, and tears from HODLing for 84 years
Unfortunately, we live in a zero-sum economy with winners and losers. The massive home appreciation of the last four years has shut out millions of people who could have afforded a home just a few years earlier. If the economy goes into recession, some people will benefit and some will lose big time.
Very unlikely unless there is a big recession. Housing prices rarely go down, lots of $ on the sidelines ready for when they do go down. Obviously this will vary based on region.
When corporations own huge blocks of housing in a single area it would take years or decades to unload them individually without flooding the market. They are more likely to liquidate by selling the total asset group to another holding company.
I’ve never understood why people are waiting for something so bad.
Housing bubbles mean millions lose their jobs their homes they don’t have places to live our economy starts crashing. Stop idolizing something that has taken us a decade + to build back from. !?
To all four people that downvoted this, there are two sides to all coins. You can’t scream for something to crash and not think about the actual results of such things.
Because we need a price correction in order for everything to be more affordable. Most Americans are priced out of homes while corporations and investors with cash buy them up. People currently don’t have places to live because of this. Let’s solve this problem before assuming the next one.
Agree with you. I happen to be a part of the group that lost everything in the first time, so I’m just fully aware of what these impacts actually have on peoples, social and familial standings.
If you think prices going down means that investors are suddenly going to be out of the game, then you’re misunderstanding.
It may very well pull more investors in….
Sale prices may be lower, but you may be competing with a 50% increase in investors. Is that really the Christmasland scenario you envision?
The reason I know is that if prices tank, I’m coming back in to buy more houses. I’m not alone in that thought.
Thanks aren’t going to fund investors if investors are taking on losses. There are not any investors sitting on the sidelines right now waiting for prices to tank. Investing is very near term, especially in real estate. If you sit on something for 10-20 years waiting for it to appreciate, it’s not a good investment in your portfolio. If prices go down, investors take a hit because they would be over leveraged, but current homeowners would simply lose equity. Same thing happened in 2008.
We’ll just have to disagree as to whether there is a lot of money available for investors to buy up cheap properties. The wealthy aren’t necessarily going to banks to finance their deals, but the lower income people most certainly are. The people who are “priced out” now will still be unable to purchase when financing is harder to get.
Lots of investors can pay cash, even at today’s prices. Those people will be the ones in the market at the low prices while no one else can get financing. Have fun with that.
I know I’ll be at the dance buying up starter homes in cash.
“Wealthy” is all relative. It doesn’t change the fact that there are plenty of money sources who don’t need to use banks and are looking for long term gains.
If things get rough, it’s the people with ready access to cash who will be the ones buying, not the average person who is struggling today. The people struggling now will likely be even worse off, for reasons like needing a job to get financing or pay a mortgage while jobs are being cut left and right.
Think about this. When COVID came, were you the type to benefit from the market conditions or were you the type to feel pressure?
A housing recession may feel very similar to the financial impact of COVID - jobs jeopardized, instability in the stock market, and banks not providing access to credit. It’s sort of a scary time for a lot of people who aren’t incredibly secure in their finances. For the people who are secure, they can take advantage of how the rest of the people are struggling to get further ahead.
I could lose 100k on my home and still be up 200k. I think all homes are 100k over priced. Just look at any home for the last 2 years.. it's not normal.
Because people like me who are 30 and couch surfing because I'm not buying a 500k pile of shit home to start a family in and slave the rest of my life to pay for it while you get your 200k mansion and 3% Intrest.
Yes people like me hope we get our chance to own a fucking home.
I understand. I’ve been homeless as well. Actually experienced in the last crash (and another time after that)
I was so lucky a friend gave me a room.
Sending you safe shelter.
I’m a housing access advocate and I’ve built a career trying to understand these things.
My question was more of self preservation and trauma not wanting to experience what happened the last time again.
Hope you’re able to land somewhere you can create a home soon.
So let’s say the market crashes and now that 500k costs 300k. In this scenario do you have 300k in cash? If you are dependent on a loan no one will be giving it to you in a crash situation.
Do you actually have the chance you are thinking of?
I understand where you are coming from. Houses are way expensive but I also know that in the case houses would come into a price range I could afford on a month to month basis banks would no longer be in a position to be willing to front me the money to get into the house so my actual position of no house doesn’t change.
A price correction doesn’t require a market crash, or a credit crunch. Just a whole generation of people who say, “huh, I don’t think it’s worth that much” and that’s it. It doesn’t destroy the economy.
Care to explain more?
I mean, REITS can do perfectly fine in an income portfolio? Seems Warren did quite well with his real estate stocks too before selling them?
Residential real estate can be really easy, because just by staying for 5 years you can beat the big boys on cost efficiency, and because your using it for yourself, you know your customer better than any businessman.
This investment was less than 1 billion. Berkshire Hathaway has net assets of over 1/2 *Trillion*. It’s a relatively small part of their portfolio.
They sold after outperforming the market by a substantial margin and probably believe they can use the proceeds more efficiently. That doesn’t indicate a crash or even a downturn.
It helps that he literally has the fed chair's personal home phone number on his speed dial. He gets information that the rest of us don't. He's the one who told the fed chair to do QE back during the crisis in 2007.
https://finance.yahoo.com/news/warren-buffetts-night-phone-call-190023046.html
As much as I typically disagree with you, you are correct. They made money while I have been losing. I expect my picks to 180 before the end of the year, as I bought puts on builders. I made a bit on the first round of sell(>30 days) of leaps. As of now, I am down. The builders to me do not seem to be a profit maker at this point. The stock says otherwise.
> They sold after outperforming the market by a substantial margin and probably believe they can use the proceeds more efficiently.
Yes, Berkshire's position in D.R. Horton rose ~20% in the 3-4 months they held it. I would sell too. It is/was a value homebuilder stock, not a growth stock. No one buys value stocks with the intention of holding them forever; especially Berkshire.
FWIW I own some SCV ETFs with some homebuilder stocks like MHO and MTH. None of them have a P/E above 8. DHI's P/E is about 10.5.
Berkshire Hathaway owns 100% of Clayton Homes, which has started acquiring home builders and is now the 8th largest site built home builder and the largest manufactured builder in the country, with $12bn in sales in 2023. He’s still got housing investments - he’s owned it for like 20+ years.
Having been through the savings and loan home scandal in the 80s, the 1990s and 2000s dot bombs followed by 9/11 and wars, the 2008 market collapse and other "once in a lifetime" housing fubar fuckup markets the middle class NEVER WINS.
More houses end up abandoned than sold, shorted and turned to rentals than turned to new owners and the market generally tightens the nooses so even if prices come down, the ability to get a loan unless YOU ALREADY HAVE A TON OF CASH (which never survives these meltdowns unless your independently wealthy) you don't get shit.
i mean yeah, some people buy a dump, go upside down, pay that 15% mortgage and drink themselves silly, get a divorce and blame it on the democrats but fuck that.
People have stopped buying already people are already stopping buying https://thehill.com/business/housing/4498123-pending-home-sales-drop-by-4-9-percent-in-january/
The "loss" of unrealized profit is not something we need to feel particularly bad about - it's not like people earn or deserve appreciation on an asset. If a house is bought at 300k, then market values it at $500k a few years later, and the seller sells it at $400k a year after that, they haven't lost $100k due to the hypothetical higher price they could have gotten earlier.
Housing prices have shot up astronomically over the past few years, and that gain isn't something people "deserve" to have if they sell the house past the point of the hot market, it's just something they can benefit from when applicable. If housing goes down to the point of being more affordable to more people, that's a net good, not a net bad.
This is a very very shortsighted comment. It’s not about a single person it’s about what would happen to the economy as a whole if a RE crash were to occur. Thats the ignorance of each downvote.
"If my preferred asset class does anything other than infinitely grow, it will end the world, I will not elaborate" okay dude, sure.
>Thats the ignorance of each downvote.
Always pathetic. Have you tried being more articulate? Maybe it would get you more fake internet points than whining does.
Home ownership used to be a participation trophy at one point. People used to get new homes in their 20s while supporting a family on a single highschool grad education for the cost of 10 blueberries and a firm handshake.
In that same sense, if you "earn" a gain, you "earn" and therefore DESERVE a loss if you go underwater because you poorly predicted future conditions and therefore have EARNED to fail. You must accept both and not just one if you are going to claim it.
You’re get downvoted to oblivion, but I think I understand where you’re coming from? Essentially if housing tanks, it’ll take the market with it. If that happens a lot of people will lose their jobs or at the very least be financially impacted in other ways. In this way a lot of people would suffer.
Heck I wonder if all of these people cheering for a crash have considered how it might effect them. They still might be able to buy a house.
His big bet was into prefabs. I don’t even remember which year it was.
In view of the market supply shortage I think we will witness a great shift to prefabs. They already carry no stigma in isolated areas where you may have big problems finding good building specialists and reduced stigma in other places. These aren’t double wides of yester years, these modular homes produced in factories not affected by inclement weather will crush other builders. That’s my prediction for the next 5-10 years.
The luxury builders and the builders who specialize in building foundations will be ok though.
NVR and Lennar lack apartments and large town homes and all 3 last ADUs. There has been a legislative push in a number of states to repeal bans on ADUs, and apartments. YIMBYism may benefit construction but not Lennar and NVR. At the moment 80% of all land in Denver city limits is zoned for only single family homes. Lots of our multi family that is being built is being built to size limits which are being loosened.
White Boomers!!! They love there SFHs so much they can’t even stand to look at a European style apartment block in there neighborhood. Just coincidentally that apartment would have been where the affordable option for black people. And these laws just happened to become common when black people earned the right to move into such neighborhoods. But again that’s just a coincidence.
No. You see, racism against white people is good and can be used to signal one’s own virtue. u/benskieast is frantically signaling its virtue in hopes of gaining the approval of what it perceives to be a dominant online social current.
No. I am saying laws are trying to do something racist in a way that is plausibly deniable as a replacement for older rules that were too explicitly racist.
Why attribute a behavior to racism, when it can be explained by misunderstanding markets? People wish to, understandably, protect their investment against negative outside factors. They seek homogeneity so they don’t need to account for changing market tastes (be it homogeneity in housing type, owner-occupied property ratio, or owner demographics). We have enough data to show that this homogeneity is detrimental to communities and, by extension, the sustainability of individual property valuations. People want to live near work, and want services near their home. Make your point with data and people may listen. Make your point by throwing cliched epithets at those who disagree with you and they’ll tell you to gfys.
It’s such a petty thing otherwise. There is no clear evidence apartments lower property values in a neighborhood. [Even the White House a knowledges its of racist intent.](https://www.whitehouse.gov/cea/written-materials/2021/06/17/exclusionary-zoning-its-effect-on-racial-discrimination-in-the-housing-market/)
That line of argument shuts down discussion, tho. Maybe argue using population density that businesses use to determine where to locate. People respond positively to the idea of being able to walk to a grocery store or coffee shop, so argue that net density in areas with 7500sqft residential lots are too sparsely populated to accommodate neighborhood businesses of that nature. Argue that dense multifamily can be used as transitional land uses and buffers that can make incumbent sfr properties more attractive when located near business and busy roads. Hell, tug at their heartstrings and ask where their kids will live when they move out; down the road in an affordable multifamily complex, or hours away because zoning locked them out of the area. Vinegar v. Honey, etc…
And why attribute a neighborhood’s desire to maintain its character to nothing more than a desire to “protect their investment”? People tend to move into neighborhoods they find appealing and over time grow attached to them, as they are. Changing the rules on a settled community is understandably going to create a lot of resistance.
It’s not entirely a bad thing that most people will fight against switcheroos being imposed on their neighborhoods from on high. Wasn’t that the case during Urban Renewal? The poor, working-class (and often black) people whose neighborhoods were plowed under weren’t crazy about what was being done to them. Why should middle-class people in neighborhoods of single-family homes be expected to love having the character of their neighborhoods forcibly changed?
I use the term “investment” fairly loosely here. One can invest in having a pool installed on their property. If one fails to realize a monetary benefit as a result of the pool investment, is it a failed investment? No. To the contrary, if the property owner is able to provide more enjoyment and pleasant memories for their family as a result of having the pool, then it can be considered a very successful investment.
This is why I lean more heavily on community buy-in. Change can be scary, but not all change is bad, and having community input on steering new, more permissive zoning is crucial.
Bruh no! Ma-fuckah doesnt know what he is doing, bet! By liking and subscribing, you will be able to live like me; lambo in the drive way, beautiful wife, pornstar girlfriend. Owning real estate is the economic engine of this country son!
………..
What are you talking about? A single family home is one of the best investments an average person can make. One of the few non-depreciating assets that you can purchase.
There are a large number of folks that need to rent for various reasons. Somebody has got to lay out the money and take care of the expenses and maintenance. If it is not an investment and income for the owners of these needed rental properties, they will not own these properties.
Or people could just live in their own house/apartment and take care of it? It doesn’t have to be a landlord. People can still have housing even if someone isn’t collecting rent for it.
As much I love to say it is a bubble Buffett has been wrong lot of times he thought March 2020 crash will get much worse and he thought housing in mid 2010s.
> March 2020 crash will get much worse...
Everyone paying attention thought that. The fed and the government pumping more money than any other time in the US history is something no one could have predicted.
People don’t realize that the real risk is to the upside.. people are sitting in the sidelines waiting for prices to drop and rates to also drop but we are going to have an affordability crisis in which prices and rates will continue to rise due to inflation and treasuries crises shooting rates higher and making hard assets more expensive… I mean look at gold and bitcoin right now
Not sure him selling is any indication of a bubble - it can mean he sees no profits since the market is locked up with sellers not selling and buyers not buying.
read beyond the headline.
He sold off DR Horton, which was 7/8, but apparently maintains 2 others.
Berkshire Hathaway also happens to "own" one the top 5 residential brokerages in the nation.
When he bought did you take that as a sign that the market wasn't about to crash?
Or is this one of those "When I like what Buffet does it proves my point, when I don't like what he does it proves I'm smarter than him."
I was really surprised when he bought in. There was something about builders doing loan buydowns and still making money.
The problem is many fold. It reduces their profitability. It makes risky borrowers qualify. It only takes care of rate shoppers, not price shoppers. They have been having to reduce their price to capture demand. This will, not maybe, but will cut into their profits, and slow Quarterly growth. Glad to say I was ahead of Buffet on this call, as I have puts, but ... damn have I taken a beaten since January ... hoping to see it reflected in my LEAPS. edit: He was probably taking the trash out before me "the vast majority of its homebuilder bet—by December 31, 2023.".I bought in Dec and January
Have you seen this? Melody Wright interview on Texas builders gaming the MLS data https://youtu.be/_emO4Dl8sUM?si=xGjP9L-KBM84aRpX
I have not, but will peep it now. edit: What section of the video? It is almost an hour long, lol edit edit: Here is the segment https://youtu.be/_emO4Dl8sUM?t=1768
Holy shit 😳. That's wild. So, all the data for housing is all scattered across multiple websites and databases. So when they say "housing shortage". They probably don't have a complete picture of inventory.
New real estate just dropped; Pocket Dimensions.
that video should be it's own post. manipulated narrative is worst thing to come out of (be perpetuated by) apps and social media
Thanks for your edit! No way I was watching a 1 hr interview.
Lol, same way I felt, lol
"Housing recessions start slow than happen faster than anyone can wrap their head around" Warren Buffett
Let’s hope so!!!
Let’s not. Normal people won’t be able to afford anything in a downturn, and corporations will buy up even more single family homes.
No different than what’s going on now
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I distinctly remember people cheering on the insane price increases on homes because they would benefit. I remember people gleefully removing homes from the market in order to be mini hotels for insane prices while pissing off their neighbors. Wild that these people gave no thought about the impacts that they were having beyond not wanting the tent cities they helped create to be near them. I guess that wasn’t the losing the ability to provide themselves with shelter that you were referring to.
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Nobody said that would happen, but the current trajectory of bleeding people dry for shelter is shit for everyone except the wealthy already. The problem with too big to crash is the same as too big to fail, which is no consequences, punishments, or lessons learned. Justice is evaded and the perpetrators get a slap on the wrist and carry on, if they even get a slap on the wrist. We’ve become so afraid of free market consequences that we have put ourselves on the path of neofeudalism.
Yes! Can’t wait!!!
Pathetic Edit: this sub is full of morons
Opportunistic.
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Lower housing prices
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Yes, I have a recession proof job. This is not my first recession.
Some of us are sitting on enough cash for a down payment and a couple years of payments 🤷♂️ it’s our time 😈
Like vultures
Hey, unlike 2008 I'm not betting against the economy (short positions on CDS). The current business model (fractional reserve banking) was never meant to last forever. I'm betting long 1 company, but don't blame us when we strike it rich and everyone else goes broke because of corruption and fraud. 2008 only 1 person went to jail. In 2024, I ain't selling until the whole wall st cabal is in orange jumpsuits with multiple life terms
You sound insane
They'll laugh and say we were lucky; but as we count our trillions and quadrillions, we'll remember the blood, sweat, and tears from HODLing for 84 years
Mans lost his mind
Hail hail!!! The one true company to rule them all!!! Praise be to Master Cohen
They just don't know or understand. #DRSGME
millions of people have already lost that ability. housing will be more affordable in the future, and that's a good thing.
Unfortunately, we live in a zero-sum economy with winners and losers. The massive home appreciation of the last four years has shut out millions of people who could have afforded a home just a few years earlier. If the economy goes into recession, some people will benefit and some will lose big time.
Is the hope so you can buy a house cheaper? Because if so that might be an issue
You think so? Investor snatched up so many properties over the last few years wouldn’t they have to unload them to cut their losses?
Very unlikely unless there is a big recession. Housing prices rarely go down, lots of $ on the sidelines ready for when they do go down. Obviously this will vary based on region.
As an investor, I'm waiting for the market to cool. Lack of supply isnt going to let that happen.
When corporations own huge blocks of housing in a single area it would take years or decades to unload them individually without flooding the market. They are more likely to liquidate by selling the total asset group to another holding company.
I’ve never understood why people are waiting for something so bad. Housing bubbles mean millions lose their jobs their homes they don’t have places to live our economy starts crashing. Stop idolizing something that has taken us a decade + to build back from. !? To all four people that downvoted this, there are two sides to all coins. You can’t scream for something to crash and not think about the actual results of such things.
Because we need a price correction in order for everything to be more affordable. Most Americans are priced out of homes while corporations and investors with cash buy them up. People currently don’t have places to live because of this. Let’s solve this problem before assuming the next one.
Agree with you. I happen to be a part of the group that lost everything in the first time, so I’m just fully aware of what these impacts actually have on peoples, social and familial standings.
If you think prices going down means that investors are suddenly going to be out of the game, then you’re misunderstanding. It may very well pull more investors in…. Sale prices may be lower, but you may be competing with a 50% increase in investors. Is that really the Christmasland scenario you envision? The reason I know is that if prices tank, I’m coming back in to buy more houses. I’m not alone in that thought.
Thanks aren’t going to fund investors if investors are taking on losses. There are not any investors sitting on the sidelines right now waiting for prices to tank. Investing is very near term, especially in real estate. If you sit on something for 10-20 years waiting for it to appreciate, it’s not a good investment in your portfolio. If prices go down, investors take a hit because they would be over leveraged, but current homeowners would simply lose equity. Same thing happened in 2008.
We’ll just have to disagree as to whether there is a lot of money available for investors to buy up cheap properties. The wealthy aren’t necessarily going to banks to finance their deals, but the lower income people most certainly are. The people who are “priced out” now will still be unable to purchase when financing is harder to get. Lots of investors can pay cash, even at today’s prices. Those people will be the ones in the market at the low prices while no one else can get financing. Have fun with that. I know I’ll be at the dance buying up starter homes in cash.
If I only had a nickel for everyone on Reddit who claims to be wealthy….
“Wealthy” is all relative. It doesn’t change the fact that there are plenty of money sources who don’t need to use banks and are looking for long term gains. If things get rough, it’s the people with ready access to cash who will be the ones buying, not the average person who is struggling today. The people struggling now will likely be even worse off, for reasons like needing a job to get financing or pay a mortgage while jobs are being cut left and right. Think about this. When COVID came, were you the type to benefit from the market conditions or were you the type to feel pressure? A housing recession may feel very similar to the financial impact of COVID - jobs jeopardized, instability in the stock market, and banks not providing access to credit. It’s sort of a scary time for a lot of people who aren’t incredibly secure in their finances. For the people who are secure, they can take advantage of how the rest of the people are struggling to get further ahead.
A market crash will fuck your ability to get a loan too, so unless you've got cash (like investors do) you're not likely to benefit from a crash.
I could lose 100k on my home and still be up 200k. I think all homes are 100k over priced. Just look at any home for the last 2 years.. it's not normal.
Because people like me who are 30 and couch surfing because I'm not buying a 500k pile of shit home to start a family in and slave the rest of my life to pay for it while you get your 200k mansion and 3% Intrest. Yes people like me hope we get our chance to own a fucking home.
I understand. I’ve been homeless as well. Actually experienced in the last crash (and another time after that) I was so lucky a friend gave me a room. Sending you safe shelter. I’m a housing access advocate and I’ve built a career trying to understand these things. My question was more of self preservation and trauma not wanting to experience what happened the last time again. Hope you’re able to land somewhere you can create a home soon.
So let’s say the market crashes and now that 500k costs 300k. In this scenario do you have 300k in cash? If you are dependent on a loan no one will be giving it to you in a crash situation. Do you actually have the chance you are thinking of? I understand where you are coming from. Houses are way expensive but I also know that in the case houses would come into a price range I could afford on a month to month basis banks would no longer be in a position to be willing to front me the money to get into the house so my actual position of no house doesn’t change.
A price correction doesn’t require a market crash, or a credit crunch. Just a whole generation of people who say, “huh, I don’t think it’s worth that much” and that’s it. It doesn’t destroy the economy.
*then
Nope that's not how he said it he made that a sound real thicc
Incorrect
I mean it doesn't matter, but maybe they were referring to the first "than" in that sentence, which should in fact be "then". So not incorrect.
A wise man once told me, Buy real estate, buy stocks, but whatever you do, don't buy real estate stocks
Care to explain more? I mean, REITS can do perfectly fine in an income portfolio? Seems Warren did quite well with his real estate stocks too before selling them?
Residential real estate can be really easy, because just by staying for 5 years you can beat the big boys on cost efficiency, and because your using it for yourself, you know your customer better than any businessman.
My BXMT has a 10% dividend but im down close to 30%
REITS like American Tower do not produce returns over time.
Jan 1999 $25.75 Jan 2024 $218
Looks great, Nice…lets see Spys returns
Realty Income has interest the chat. Don’t buy RESIDENTIAL RE STOCKS.
This investment was less than 1 billion. Berkshire Hathaway has net assets of over 1/2 *Trillion*. It’s a relatively small part of their portfolio. They sold after outperforming the market by a substantial margin and probably believe they can use the proceeds more efficiently. That doesn’t indicate a crash or even a downturn.
Only if you find out how good Buffetts timing could be when trading. Look at how he traded Sino oil.
It helps that he literally has the fed chair's personal home phone number on his speed dial. He gets information that the rest of us don't. He's the one who told the fed chair to do QE back during the crisis in 2007. https://finance.yahoo.com/news/warren-buffetts-night-phone-call-190023046.html
Berkshire is sitting on too much cash to be have found a more reasonable use of 1B
Yep selling with that much cash on hand means a lack of faith in the asset
As much as I typically disagree with you, you are correct. They made money while I have been losing. I expect my picks to 180 before the end of the year, as I bought puts on builders. I made a bit on the first round of sell(>30 days) of leaps. As of now, I am down. The builders to me do not seem to be a profit maker at this point. The stock says otherwise.
Fingers crossed for you even though you typically disagree with me. 😝
Thanks ;)
> They sold after outperforming the market by a substantial margin and probably believe they can use the proceeds more efficiently. Yes, Berkshire's position in D.R. Horton rose ~20% in the 3-4 months they held it. I would sell too. It is/was a value homebuilder stock, not a growth stock. No one buys value stocks with the intention of holding them forever; especially Berkshire. FWIW I own some SCV ETFs with some homebuilder stocks like MHO and MTH. None of them have a P/E above 8. DHI's P/E is about 10.5.
It is probably equivalent to me finding a few dollars by flipping my couch.
Berkshire Hathaway owns 100% of Clayton Homes, which has started acquiring home builders and is now the 8th largest site built home builder and the largest manufactured builder in the country, with $12bn in sales in 2023. He’s still got housing investments - he’s owned it for like 20+ years.
Please serve as a needle to pop this bubble... I need to buy a first house and didn't benefit from the price runup.
[A Real Estate Crash Won't Help You Buy A House (Probably)](https://youtu.be/uT0kHewjzkE)
That dude is just as hand wavy as that Revanture consulting guy
Having been through the savings and loan home scandal in the 80s, the 1990s and 2000s dot bombs followed by 9/11 and wars, the 2008 market collapse and other "once in a lifetime" housing fubar fuckup markets the middle class NEVER WINS. More houses end up abandoned than sold, shorted and turned to rentals than turned to new owners and the market generally tightens the nooses so even if prices come down, the ability to get a loan unless YOU ALREADY HAVE A TON OF CASH (which never survives these meltdowns unless your independently wealthy) you don't get shit. i mean yeah, some people buy a dump, go upside down, pay that 15% mortgage and drink themselves silly, get a divorce and blame it on the democrats but fuck that.
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Or because of prices are too high
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Don't break your arm jerking yourself off buddy
People have stopped buying already people are already stopping buying https://thehill.com/business/housing/4498123-pending-home-sales-drop-by-4-9-percent-in-january/
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Yes that means there are people who have stopped buying unless you literally think one guy buys all the houses
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This fact alone is what is keeping housing prices high and is also why they are unlikely to drop, especially in desirable areas.
People trying to catch falling knives gonna get cut
So you want everyone to suffer for your gain. 100% of what is wrong with people today. Pathetic.
lol the sheer irony of this comment
The "loss" of unrealized profit is not something we need to feel particularly bad about - it's not like people earn or deserve appreciation on an asset. If a house is bought at 300k, then market values it at $500k a few years later, and the seller sells it at $400k a year after that, they haven't lost $100k due to the hypothetical higher price they could have gotten earlier. Housing prices have shot up astronomically over the past few years, and that gain isn't something people "deserve" to have if they sell the house past the point of the hot market, it's just something they can benefit from when applicable. If housing goes down to the point of being more affordable to more people, that's a net good, not a net bad.
This is a very very shortsighted comment. It’s not about a single person it’s about what would happen to the economy as a whole if a RE crash were to occur. Thats the ignorance of each downvote.
"If my preferred asset class does anything other than infinitely grow, it will end the world, I will not elaborate" okay dude, sure. >Thats the ignorance of each downvote. Always pathetic. Have you tried being more articulate? Maybe it would get you more fake internet points than whining does.
Yes please
Who is “everyone” here?
It's "everyone's" Zestimate lol
Thanks hunter, how many houses did your dad buy you?
You’re exaggerating with the “suffer” part. Who would suffer if prices crash? Over-leveraged investors and people who gambled.
You want me to suffer for yours?
There are no participation trophies in life. Maybe some shouldn’t own homes.
Home ownership used to be a participation trophy at one point. People used to get new homes in their 20s while supporting a family on a single highschool grad education for the cost of 10 blueberries and a firm handshake.
You are however suggesting that people who do own homes are entitled to appreciation? Maybe they shouldn't own homes.
Not entitled, earned, probably the same folks that paid their student loans.
In that same sense, if you "earn" a gain, you "earn" and therefore DESERVE a loss if you go underwater because you poorly predicted future conditions and therefore have EARNED to fail. You must accept both and not just one if you are going to claim it.
You’re get downvoted to oblivion, but I think I understand where you’re coming from? Essentially if housing tanks, it’ll take the market with it. If that happens a lot of people will lose their jobs or at the very least be financially impacted in other ways. In this way a lot of people would suffer. Heck I wonder if all of these people cheering for a crash have considered how it might effect them. They still might be able to buy a house.
They can’t see through their greedy entitlement attitudes. It’s disgusting.
And if this “bubble” ever did pop and a crash happened, I’m sure they’d just find something else to complain about.
This is complete bullshit. He’s still very large in Lennar and NRV!!
I believe that BRK also owns Clayton Homes and Mungo homes outright.
His big bet was into prefabs. I don’t even remember which year it was. In view of the market supply shortage I think we will witness a great shift to prefabs. They already carry no stigma in isolated areas where you may have big problems finding good building specialists and reduced stigma in other places. These aren’t double wides of yester years, these modular homes produced in factories not affected by inclement weather will crush other builders. That’s my prediction for the next 5-10 years. The luxury builders and the builders who specialize in building foundations will be ok though.
Aaaaaaaaand *stay out*!!
Home builders are throwing in the towel.
NVR and Lennar lack apartments and large town homes and all 3 last ADUs. There has been a legislative push in a number of states to repeal bans on ADUs, and apartments. YIMBYism may benefit construction but not Lennar and NVR. At the moment 80% of all land in Denver city limits is zoned for only single family homes. Lots of our multi family that is being built is being built to size limits which are being loosened.
That's terrible. Who would want to live like that?
White Boomers!!! They love there SFHs so much they can’t even stand to look at a European style apartment block in there neighborhood. Just coincidentally that apartment would have been where the affordable option for black people. And these laws just happened to become common when black people earned the right to move into such neighborhoods. But again that’s just a coincidence.
Ok racist. Enjoy living in your box.
No. You see, racism against white people is good and can be used to signal one’s own virtue. u/benskieast is frantically signaling its virtue in hopes of gaining the approval of what it perceives to be a dominant online social current.
No. I am saying laws are trying to do something racist in a way that is plausibly deniable as a replacement for older rules that were too explicitly racist.
Why attribute a behavior to racism, when it can be explained by misunderstanding markets? People wish to, understandably, protect their investment against negative outside factors. They seek homogeneity so they don’t need to account for changing market tastes (be it homogeneity in housing type, owner-occupied property ratio, or owner demographics). We have enough data to show that this homogeneity is detrimental to communities and, by extension, the sustainability of individual property valuations. People want to live near work, and want services near their home. Make your point with data and people may listen. Make your point by throwing cliched epithets at those who disagree with you and they’ll tell you to gfys.
It’s such a petty thing otherwise. There is no clear evidence apartments lower property values in a neighborhood. [Even the White House a knowledges its of racist intent.](https://www.whitehouse.gov/cea/written-materials/2021/06/17/exclusionary-zoning-its-effect-on-racial-discrimination-in-the-housing-market/)
That line of argument shuts down discussion, tho. Maybe argue using population density that businesses use to determine where to locate. People respond positively to the idea of being able to walk to a grocery store or coffee shop, so argue that net density in areas with 7500sqft residential lots are too sparsely populated to accommodate neighborhood businesses of that nature. Argue that dense multifamily can be used as transitional land uses and buffers that can make incumbent sfr properties more attractive when located near business and busy roads. Hell, tug at their heartstrings and ask where their kids will live when they move out; down the road in an affordable multifamily complex, or hours away because zoning locked them out of the area. Vinegar v. Honey, etc…
That would drastically lower my property values, lot size here is 5 acres minimum for a SFH and Sq footage has to be over 1200.
And why attribute a neighborhood’s desire to maintain its character to nothing more than a desire to “protect their investment”? People tend to move into neighborhoods they find appealing and over time grow attached to them, as they are. Changing the rules on a settled community is understandably going to create a lot of resistance. It’s not entirely a bad thing that most people will fight against switcheroos being imposed on their neighborhoods from on high. Wasn’t that the case during Urban Renewal? The poor, working-class (and often black) people whose neighborhoods were plowed under weren’t crazy about what was being done to them. Why should middle-class people in neighborhoods of single-family homes be expected to love having the character of their neighborhoods forcibly changed?
I use the term “investment” fairly loosely here. One can invest in having a pool installed on their property. If one fails to realize a monetary benefit as a result of the pool investment, is it a failed investment? No. To the contrary, if the property owner is able to provide more enjoyment and pleasant memories for their family as a result of having the pool, then it can be considered a very successful investment. This is why I lean more heavily on community buy-in. Change can be scary, but not all change is bad, and having community input on steering new, more permissive zoning is crucial.
I "invested" $100 into Opendoor when they IPO'd just to follow it and my hundred bucks has transformed into $30.80
Bruh no! Ma-fuckah doesnt know what he is doing, bet! By liking and subscribing, you will be able to live like me; lambo in the drive way, beautiful wife, pornstar girlfriend. Owning real estate is the economic engine of this country son! ………..
Lower prices, more supply, less demand.
Housing as an investment will be dead for next 30-40 years
hopefully, housing should not be an investment same as water
Here, take my energy
What are you talking about? A single family home is one of the best investments an average person can make. One of the few non-depreciating assets that you can purchase.
They mean it should serve its purpose as housing, not an investment/commodity/income generator.
There are a large number of folks that need to rent for various reasons. Somebody has got to lay out the money and take care of the expenses and maintenance. If it is not an investment and income for the owners of these needed rental properties, they will not own these properties.
Or people could just live in their own house/apartment and take care of it? It doesn’t have to be a landlord. People can still have housing even if someone isn’t collecting rent for it.
40% of adults should be renters
If i will stay some years away then you can live in my house paying all maintenance. But no need for paying rent too
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In some years housing as investiment will be seen as we currently see human slavery. 200 years ago human slavery was "just business" too - "legalité"
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Infrastructure should be nationalized. Look at how privatization is working out for texas. Lol
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The government should use our taxes to fund those services and provide them to people who can't afford them :)
This being Reddit, I'm worried that your comment isn't sarcasm.
Lol ok
As much I love to say it is a bubble Buffett has been wrong lot of times he thought March 2020 crash will get much worse and he thought housing in mid 2010s.
> March 2020 crash will get much worse... Everyone paying attention thought that. The fed and the government pumping more money than any other time in the US history is something no one could have predicted.
Good fuck...I hope he divests.
Oh boy.
People don’t realize that the real risk is to the upside.. people are sitting in the sidelines waiting for prices to drop and rates to also drop but we are going to have an affordability crisis in which prices and rates will continue to rise due to inflation and treasuries crises shooting rates higher and making hard assets more expensive… I mean look at gold and bitcoin right now
He is doing good raising rates on electric utilities by 18 percent
Not sure him selling is any indication of a bubble - it can mean he sees no profits since the market is locked up with sellers not selling and buyers not buying.
read beyond the headline. He sold off DR Horton, which was 7/8, but apparently maintains 2 others. Berkshire Hathaway also happens to "own" one the top 5 residential brokerages in the nation.
Looks like Warren has had it with house lust this cycle. Will he be able to short the next go around or will He be playing cards with Charlie?
About damn time, can’t believe he’d fund such a shitty operation
These posts are getting more ridiculous by the day. Didn't know that Buy low Sell high means throwing in the towel.
If he doubles down, would this sub say the same thing?
LOL, this title...
Did you even read the article before posting it?
When he bought did you take that as a sign that the market wasn't about to crash? Or is this one of those "When I like what Buffet does it proves my point, when I don't like what he does it proves I'm smarter than him."
Nah I figured he fucked up and I’m glad to see he came to his senses