NEW YORK - Billionaire Warren Buffett said the US residential real estate slump will end by about 2011, predicting that’s how long it will take demand for homes to catch up with the supply.
“Within a year or so, residential housing problems should largely be behind us,’’ Buffett wrote Saturday in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits.’’
The worst housing decline since the Great Depression has left one in five US mortgage holders owing more than their houses are worth. Record foreclosures last year flooded a real estate market already glutted with unsold property, causing new construction to fall to the lowest level in at least 50 years.
“People thought it was good news a few years back when housing starts . . . were running about 2 million annually,’’ Buffett said. “But household formations - the demand side - only amounted to about 1.2 million.’’