Billionaire investor Warren Buffet has acknowledged that his February 2011 prediction that the housing market would recover ‘within a year or so’ was ‘dead wrong’ – but he still insists that a recovery will come sooner rather than later.
According to a Reuters report, Buffet's annual letter to the shareholders of Berkshire Hathaway acknowledged that the housing sector remains the weakest link in the national economic chain. ‘Though housing-related businesses remain in the emergency room, most other businesses have left the hospital with their health fully restored,’ he wrote.
Buffet has also felt the pinch of the rough housing market: Berkshire's quintet of housing market-related businesses laid off 15,000 people – more than one-quarter of their total workforce – since 2006.
Nonetheless, Buffet remained optimistic that the housing market will bounce back soon.
‘Every day we are creating more households than housing units,’ he continued. ‘People may postpone hitching up during uncertain times, but eventually hormones take over. And while 'doubling up' may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure.’
(Photograph courtesy of Mark Hirschey.)