Daily News Portal

Warren Buffett sees opportunities where others do not : in the real estate market

Copyright BusinessAMBE

American super investor Warren Buffett sees opportunities in the real estate market. His company Berkshire Hathaway announced Tuesday that it has bought shares in the three largest American real estate developers.

In doing so, Warren Buffett is going against the current reporting on the real estate market. But the investment may actually pay off.

In the news. Berkshire Hathaway is buying shares worth about $700 million in developer D.R. Horton. Smaller stakes were also bought in NVR and Lennar. The total investment amounts to.

  • In recent months, the mainstream media bombarded us with dantesque reports about the real estate market. worldwide and the tightening of financing conditions by banks, got many a real estate developer in trouble.
  • Buffett is countering that trend with his purchases. With good reason: the U.S. construction industry is absolutely on the rise right now.
    • Lennar, DR Horton and NVR have recorded a share price increase of about 35 percent since the beginning of the year.
    • Thanks to their huge cash reserves and easy access to capital, they are increasing their market share and are able to deliver projects even in a challenging environment.
  • In addition, this development also benefits homebuyers. The U.S. market needs many projects to address the housing shortage. Larger companies also provide more efficiency, resulting in lower prices for consumers.

‘New construction’ option attractive again

Worth noting. Paradoxically, the rebound in construction companies is partly due to interest rate hikes in the U.S..

  • These interest rate hikes have made real estate sales less attractive. Potential home buyers construction companies are taking advantage of.
  • All in all, the sector is likely to continue to grow in the coming months. The broader S&P Homebuilders Select Industry index also rose nearly 40 percent in 2023, making it one of the best performers.

© The Content Exchange, source News

Read Nore:Warren Buffett sees opportunities where others do not : in the real estate market