Warren Buffet speaks on "The Real Estate Bubble"
 

Buffett: "A lot of the psychological well-being of the American public comes from how well they've done with their housew over the years. If indeed there's been a bubble, and it's pricked at some point, the net effect on Berkshire might well be positive [because the company's financial strength would allow it to buy real-estate-related businesses at bargain prices]....

"Certainly at the high end of the real estate market in some areas, you've seen extraordinary movement.... People go crazy in economics periodically, in all kinds of ways. Residential housing has different behavioral characteristics, simply because people live there. But when you get prices increasing faster than than the underlying costs, sometimes there can be pretty serious consequences."

Munger: "You have a real asset-price bubble in places like parts of California and the suburbs of Washington, DC. "

Buffett: "I recently sold a house in Laguna for $3.5 million. It was on about 2000 sq. ft of land, maybe a twentieth of an acre, and the house might cost about $500,000 if you wanted to replace it. So the land sold for something like $60 million an acre."

Munger: "I know someone who lives next door to what you would actually call a fairly modest house that just sold for $17 million. There are some very extreme housing price bubbles going on."

to buy or not to buy, that is the question

The question is WHEN? There's been talk of a bubble for a while now...

I think the bubble in Vegas is about to burst.

there was something on tv about this last night

it was pretty interesting if real estate is your cup of tea.

There's been talk of a bubble for quite some time now. But the bubble isn't everywhere, it's very micro and depends on areas. Wether it's gonna be a bubble burst or slow deflation will change a lot as well. Personally I think it'll be a slow deflation, not an all out burst.

Being a real estate investor i feel it's in it's 'Mature' stage but in lots of places through out North America property value will continue to increase. :2 cents

uk market is booming still

True. It depends on the region. For example, the most recent bust in LA in the early 90s started out as a slow deflation then accelerated as housing inventories piled up unsold and prices kept getting slashed.

I would hope so.
I saw a listing for a house that looked almost like a duplicate of mine going for $185,000.
Back in Texas I could probably pick it up for 1/4 that if you consider the same neighborhood etc.

Yes I live in the ghetto.

Burst already! I want a nice house!

There are lots of good deals out there, you just have to look harder these days

DH

You have a link? I'd like to read the whole interview.

Yeah, that's what I thought that too...

But last month 3 houses sold in my neighborhood in Scummerlin. Each one was over a million... and this is just the beginning of the summer selling season

Don't bail out on Vegas yet

I saw this at the book store today. It says prices will ll climb until the end of the decade
http://www.amazon.com/exec/obidos/AS...716459-1004648

Interest rates going up again tomorrow

You gotta love their quotes

Here you go man...

http://money.cnn.com/2005/05/01/news...ex.htm?cnn=yes

Not a single individual shareholder asked about whether Berkshire might be implicated in the widening scandal about alleged earnings manipulations at American International Group

I'm going to sit back and wait for the interest rates to go up and all the idiots who bought with nothing down and ARMs selling their houses for what they owe or getting foreclosed on. Then rent those out to the idiots who bought with nothing down and ARMs who sold their houses and can't afford to buy another one ;)

The problem with this theory is that you then have a mortgage with a shitty interest rate, which makes it way more expensive in the long run. Unless of course you buy it cash :)

yup its going to happen -

also the cost of living is rising and peoples paychecks are staying the same and not matching the rise

I hope it drops around nyc and nj. I know a few props i'd love to buy.