Sunday, May 07, 2006

Buffett Says U.S. Housing Bubble About To Pop!!!

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Buffett Says U.S. Housing Bubble About To Pop!

A story at All Headline News reports that Warren Buffett has not only acknowledged the existence of a US Housing Bubble, but he's predicted that it's ready to pop!

No other media have reported this, near as I can tell, so I'll remain skeptical until some of the bigger media outlets pick it up, but when Buffett speaks, people listen. Could be bad news for housing stocks Monday morning, and bad news for real estate agents this summer:
According to Buffett, the U.S. housing market is coming upon a correction, saying, "What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets."
Munger adds, "There is a lot of ridiculous credit being extended in the U.S. housing sector."
Buffett says that Miami-Dade and Broward counties are seeing "a rise in unsold inventory and stagnation in price."
Buffett believes, "Dumb lending always has its consequences. It's like a disease that doesn't manifest itself for a few weeks, like an epidemic that doesn't show up until it's too late to stop it."

-- The Boy in the Big Housing Bubble