Talking about the U.S. housing market, Buffet said there were three ways to cure the nation's oversupply.
"Blow up a lot of houses, a tactic similar to the destruction of autos that occurred with the 'cash-for-clunkers' program. Speed up household formations by, say, encouraging teenagers to cohabitate, a program not likely to suffer from a lack of volunteers, or reduce new housing starts to a number far below the rate of household formations."
"Our country has wisely selected the third option, which means that whithin a year or so residential housing problems should largely be behind us, the exceptions being only high-value houses and those in certain localities where overbuilding was particularly egregious. Prices will remain far below 'bubble' levels, of course, but for every seller [or lender] hurt by this there will be a buyer who benefits. Indeed, many families that couldn't afford to buy an appropriate home a few years ago now find it well within their means because of the bubble burst."
So it sounds like Buffet is saying it's a function of supply vs demand, so simple yet sooo few actually get it! Amazingly, he also realizes that there is no good or bad market, and that every sellers who gets hurt by dropping prices equates to exactly one buyer who is helped, therefore a net neutral! Do you suppose Buffet has been paying attention to what Ouch! has been sharing fro years and years? Or maybe, just maybe there is a bit of simple wisdom in what Ouch! and William Wallace have been sharing here?!? Hmmm
