What's Ahead for Our Area Real Estate Market?

by Enrique (Henry) Saldana  (January 2013)

How do we know what's ahead for our area, Cancun–PDC–La Riviera Maya, real estate market? Well, perhaps the most bullish indicator for U.S. housing is Warren Buffet.

Let me emphasize that North Americans (USA and Canadian) citizens and legal residents are the main source of foreign buyers and investors in our area, so whichever direction the USA market economy goes, so does the local real estate market. Therefore, here is an article I just found that might be a good indicator of what will be the near future in terms of real estate sales in our area.

I hope you enjoy it, and it gives you the confidence needed to invest in our area, so far the most cost-effective investment you would ever make in Mexican real estate.

And don't forget to contact us for any real estate info you might required.

Warren Buffett Just Made a Huge Bet on the U.S. Housing Market

Warren Buffett

The legendary investor has been buying up real estate brokerages around the country as he bets on a housing turnaround. Now he is partnering with Brookfield Asset Management, a Canadian real estate investor, to more than double the size of his brokerage business.

Berkshire's HomeServices of America Inc. unit will be the majority owner of the venture to manage a U.S. residential real estate affiliate network, according to a statement on the new company's website. The firms plan to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. Brookfield's network has operated under the Prudential Real Estate and Real Living Real Estate brands.

Berkshire's managers have been positioning the firm to benefit as the U.S. home market recovers from its worst slump in seven decades…

…Buffett has been public about his bullish housing call for a while as he's built his residential real estate brokerage business, but this is a big addition.

Buffett's Outlook

Buffett, 82, said in July that the U.S. home market was beginning to improve. Berkshire's billionaire chairman and CEO tracks economic activity, in part, by studying the results of the company's more than 70 operating businesses including ones that build manufactured homes, make paint and sell insulation.

"It was just a question of getting households in balance with the supply of homes," Buffett told Bloomberg Television's Betty Liu in a July 13 interview.

"That happens in different paces in different parts of the country, but you have seen a much better balance developing here in recent months. And that's why you're seeing some pickup in prices in places."

Housing prices rose 2 percent in August from a year earlier, the biggest gain since July 2010, according to the S&P/Case-Shiller index of property values in 20 U.S. cities. The number of homes for sale in the U.S. dropped 18 percent last month from a year earlier, according to the National Association of Realtors website.

Borrowing Costs

Federal Reserve policy makers have said they will keep borrowing costs near zero to help stimulate the economy. That's led to near record-low interest rates on home loans. The average rate on a 30-year fixed mortgage was 3.63 percent, the Mortgage Bankers Association said.

The new company, HSF Affiliates LLC, will have a combined network of more than 53,000 agents operating in about 1,700 U.S. locations and who generated $72 billion in sales last year. "The network will give HomeServices exposure to markets such as New York, Boston and Northern California," Peltier said.

"Hurricane Sandy, which made landfall in New Jersey, may decrease inventory in the Northeast as homeowners assess damage," Peltier said. The storm battered homes in coastal states that account for about one out of every five U.S. real estate sales.

"Short-term, it makes properties harder to sell when parts of neighborhoods have been devastated," he said.


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