Warren Buffett: I’d Buy ‘A Couple Hundred Thousand’ Homes
“If I had a way of buying a couple hundred thousand single-family homes and had a way of managing — the management is really the problem because they’re one by one, they’re not like apartment houses — I would load up on them, and I would take out mortgages out at very, very low rates.
“If anybody is thinking of buying buying homes, five years ago they couldn’t buy them fast enough because they thought they were going to go up. But now they don’t buy them because they’re going to go down, and interest rates are far lower. It’s a way, in effect, to short the dollar because you can take a 30-year mortgage. If it turns out your interest rate’s too high, next week you refinance lower, and if it turns out it’s too low, the other guy’s is stuck with it for 30 years.
“It’s a very attractive asset class now,” he said.
Asked what he would advise a young investor trying to choose between buying stocks or purchasing a home, Buffett didn’t miss a beat.
“If I knew where I was going to want to live the next five to 10 years, I would buy a home and I’d finance it with a 30-year mortgage,” he said. “It’s a terrific deal.”
It seems like plenty of folks with a down payment have picked up on what a historic opportunity now exists with 30-year mortgages near all-time lows.
“Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to rebound 1.0 percent after a previously reported 3.5 percent fall. Contracts signed were up 8.0 percent in the 12 months to January,” a Reuters story said.
While I don’t compare myself to Buffett, for the past several months I have been telling anyone who will listen that it was a great time to buy.
As always, if you are thinking about buying, selling or renting property anywhere in New York, or know someone who is, please let me know.