Warren Buffet and the housing market

Billionaire Warren Buffet recently said the United States will experience recovery in the housing market by 2011, as he predicts the demand for housing will catch up with oversupply of properties that have accumulated due to foreclosures and negative equity. In a letter to shareholders of Berkshire Hathaway, Buffet said prices will remain well below levels seen prior to the housing crisis, but more buyers will enter the market and spur a recovery.

Buffet wrote that families who could not afford to purchase a home a few years ago will find it within their means now that mortgage rates have dropped to historic lows and home prices have fallen as well.

Buffet's $198 billion company has a real estate brokerage that has suffered in the downturn just as most financial institutions have, with profits falling 30 percent in 2010. But Bufffet believes CEOs and boards of banks and large institutions that failed during the credit crisis shouldn't be able to blame employees below them. According to Buffet, CEOs and board members must take responsibility for the decisions they made and the risks they took.

Buffet's Berkshire Hathaway recently acquired a residential real estate firm in Mobile, Alabama, through its HomeServices of America unit, Bloomberg reported. The firm, Dauphin Realty, has four branches and 85 agents, and will merge with an existing Berkshire-owned firm in Alabama.

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