Berkshire Hathaway's recent investment in homebuilding companies is a sound endorsement of the housing sector and continued strong demand for homes, and Warren Buffet's new focus is supported by decreasing building material costs and increased permitting and starts for single family home projects, indicating continued interest in purchasing a home, even as mortgage rates make home ownership more costly. Housing demand is highly correlated, and these signs of increased demand in the single family home space point to improved future performance in the multifamily market and a clear end of the current cooling period for the apartment market by 2024.
Sources discussed in this episode:
The Wall Street Journal: “Berkshire Hathaway’s Latest Bet: Homebuilder Stocks” - https://www.wsj.com/articles/berkshire-hathaways-latest-bet-homebuilder-stocks-9ef1478a
John Burns Real Estate Consulting: “How Long Will Home Builder Euphoria Last?” https://jbrec.com/insights/how-long-will-home-builder-euphoria-last/
RealPage: “How Far is Each Market Past Peak Apartment Construction?” https://www.realpage.com/analytics/markets-past-peak-construction/
The New York Times: “Why This Company’s Financial Crisis Threatens China’s Economy” - https://www.nytimes.com/2023/08/15/business/country-garden-china-property.html
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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
