After the 2008 Great Recession, there has been hesitancy to invest in real estate still in 2016. However, Warren Buffet Predicted in 2016 that real estate will not be in a bubble, meaning that housing prices will not plunge again in future. Buffet Believes that real estate is an undervalues asset that can be profitable in the future, as shown of his recent investment in Store Capital, a real estate investment trust, Specializes in REIT net-leasing. This helps reduce taxes when it comes to real estate as with net-leasing the lessee pays a portion or whole part of the taxes of the properties.
There are a 2.6 trillion dollars investable to real estate which has led Warren Buffet to believe that even if housing is not the best deal to invest in like 2012, it won’t become overpriced in the future. Warren’s prediction comes from his belief that there is no real estate bubble, meaning the demand and supply of real estate are balanced. Warren Buffets prediction also comes from his theory that a market crash is the best time to invest. Warren believes that real estate has slowly recovered, although not at an all-time best, but at a rate where it won’t be overpriced and low on demand. This has been a debate by real estate analysts who believed that real estate will plunge, even though 2016 real estate has recovered from its bubble.
Warren Buffet believes in exercising caution when investing in real estate because he could be wrong, However, his prediction remains the same that there is and will be no real estate bubble. Warren’s prediction has been backed by the steady increase in demand and increase in prices of real estate. By Warren’s prediction, he urges investors to invest carefully to increase their profitability.