Warren Buffett’s deep-pocket support of homebuilding, a Michigan home that can be yours for a single dollar and an unlikely addition to San Francisco’s skyline. From the wild and woolly world of real estate, here are the hits and misses for this week.
Hit: From Omaha with Love: Warren Buffett caught many investors by surprise this week when his Berkshire Hathaway released its second quarter 13-F filing: Buffett gave the homebuilding industry a major thumbs-up by taking stakes in D.R. Horton, Lennar and NVR, three of the nation’s largest publicly traded builders. The Motley Fool reported Buffett bought 6 million shares of D.R. Horton for $726 million, 11,112 shares of NVR for $70 million and 152,572 of Lennar for $17 million. What does Buffett know about the homebuilding sector that the rest of us don’t know? Whatever is driving his investing strategy, this was the best possible endorsement for an industry that has seen more than its fair share of tumult in recent years.
Hit: A Home for a Dollar. One corner of the real estate that Warren Buffett avoided was an unlikely listing in Pontiac, Michigan, for a significantly derelict home. But kudos are deserved for the listing agent who had some fun with this broken-down property – the home was made available for $1 and the listing employed some intentionally ripe language to lure would-be renovators. “Step inside and experience the thrilling rollercoaster of emotions as you discover every nook and cranny that’s begging for your creative touch,” the listing insisted, also pointing to an exterior where the “overgrown shrubbery and exotic weeds lend an air of mystery, inviting local critters for an impromptu garden party.” While we won’t touch this with the proverbial 10-foot pole, the listing gave us a much-needed laugh.
Miss: A Cyber Disruption. Over the past week, real estate professionals were dealing with the chaos created by a ransomware attack on Rapattoni Corp, a California-based company that provides software and data services for more than 100 MLSs nationwide. Rappatoni has clients in 12 states including California, Florida and New York, accounting for approximately 5% of all agents nationwide. While agents have been able to find workaround measures to handle their duties with the company works to resolve this issue, the disruption offers a stark reminder that ransomware is not somebody else’s problem and cybersecurity measures are still woefully behind the power and cunning of digital miscreants.
Miss: On Indefinite Hold. San Francisco has a new unlikely skyline landmark: the $1.2 billion Hayes Point tower, which is now in an unfinished state of construction because the developer was unable to find enough tenants. DailyMail.com reported that Arden Hearing, the general manager for the developer Lendlease, announced the company was “pausing construction on Hayes Point until markets normalize and we’re able to bring in early tenancy commitments, or a capital partner, or both.” The property was designed to be a mixed-use complex with 333 residential units and 290,000 square feet of office space plus street-level retail and arts space. Hearing added that Lendlease will “monitor the markets while exploring options for a potential re-start in 2024.”
Miss: California Dreaming Deferred. And while we’re on the topic of California, the state’s expensive housing market has become more onerous. According to new data from the California Association of Realtors (CAR) that found the state’s affordability level sank to its the lowest level in nearly 16 years. Less than one in five (16%) home buyers could afford to purchase a median-priced, existing single-family home in California in second quarter, down 19% in the first quarter and down from 17% in the second quarter of 2022. The statewide median price for a single-family home is $830,620 statewide median-priced and a median-priced condominium or townhome is $640,000. For first-time buyers, especially working-class households, getting a chance to pursue the American Dream of homeownership in California has become a nightmare.
Phil Hall is editor of Weekly Real Estate News. He can be reached at email@example.com.