Warren Buffet, Ron Peltier: "This is a time of opportunity"

Team spirit turns hockey star into real estate czar
By Noelle Knox, USA TODAY
WASHINGTON — Lenders are collapsing, home sales and prices in many markets are falling and lots of investors are panicking. Not Warren Buffett. He told a group of his real estate managers late last month in Omaha that he sees this as a time of opportunity.
The man who will try to seize some of those opportunities for him is Ron Peltier, CEO of HomeServices of America, the real estate arm of Berkshire Hathaway (BRKA, BRKB) and the nation's second-largest residential brokerage firm. It's Peltier's task to scope out deals with high-quality, but beaten-down, realty firms that might be ripe for acquisition.
"We want to be in the top 60 markets in America in the next five years," Peltier says. "And we want to be the No. 1 or No. 2" real estate company in those areas.
Since Buffett bought HomeServices seven years ago, the Minneapolis-based company has shot up from about 4,000 agents in three markets to 20,000 agents in 20 markets, including Prudential California and Edina Realty in Minneapolis. HomeServices also offers homeowners insurance and title services, and it runs a mortgage venture with Wells Fargo.
In keeping with Buffett's conservative approach, Peltier's lending division, which accounts for about 15% of the company's profits, avoided offering the kind of risky adjustable-rate loans that have burned many lenders.
"I don't want to sound holier-than-thou, but it was irritating when there were all kinds of players out there in the market offering all kinds of products that were questionable," says Peltier, 58.
HomeServices has a broad reach
HomeServices of America is the nation's second-largest real estate brokerage firm, with about 20,000 agents in 20 markets across the country.



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Some home buyers gain edge from credit crisis

By Christine Dugas and Sandra Block, USA TODAY
August 27, 2007


What credit crunch? Home buyers with solid credit and money for a down payment are now better positioned than they were a few weeks ago.

The average 30-year fixed mortgage rate is at a three-month low. Home prices in many areas have fallen. And despite the meltdown in non-traditional mortgages, many community banks still offer jumbo loans (above $417,000), though rates have risen.

"If you want to move up to a bigger house or buy a home for the first time, and you have the credit and qualifications to do so, it's an excellent time to buy," says Gerri Detweiler of FreeRateSearch.com.

Contributing to a Buyer's Market:

•Lower long-term mortgage rates. The average 30-year fixed rate reached 6.52% last week, the lowest since May 31, according to Freddie Mac (FRE). Frank Nothaft, Freddie Mac's chief economist, says declining yields for Treasury securities and the housing slowdown helped produce lower mortgage rates.

•Falling home prices. Nationwide, median home prices fell 1.5% in the second quarter, according to the National Association of Realtors. In addition, sales were down in most states, the NAR said.

That's given buyers with sound credit a lot of bargaining power. James Aberle, 38, of Phoenix recently paid $288,870 for a home originally listed at $350,000. The builder, through its mortgage arm, arranged 100% financing and paid for private mortgage insurance, which typically kicks in for buyers who put down less than 20%. The builder also paid $7,400 toward closing costs, Aberle says.

And for some buyers, real estate appraisals are producing lower home values, allowing them to renegotiate the price, says Kyle Kilpatrick of LendingTree.com.

•Available jumbo loans. Many lenders have abandoned non-traditional loans, including jumbos. That's because investors, fearful that the crisis in the subprime market is spreading, are reluctant to buy jumbos and other loans that mortgage investment giants Fannie Mae and Freddie Mac won't buy. But now, many community and national banks have stepped in to offer jumbo loans. They're better positioned than some other lenders to make those types of loans because they can fund them with customer bank deposits, says James Chessen of the American Bankers Association.

•Lower rates on adjustable-rate mortgages. Rates on ARMs are often based on Treasury yields, which have fallen, notes Keith Gumbinger of HSH Associates.

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New-Home Sales Post Surprising Gain

MSNBC.com

Separate data show big-ticket factory orders jumped in July
The Associated Press
Updated: 10:34 a.m. PT Aug 24, 2007

WASHINGTON - Sales of new homes perked up, while factory orders took off in July, raising hopes that the economy can safely weather financial turmoil that has shaken Wall Street.

The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally adjusted annual rate of 870,000 units. A second report showed that orders to factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months.

Both reports were better than analysts expected. They were forecasting home sales to fall and were calling for a much smaller, 1 percent gain in factory orders.

In the housing report, the improvement in sales reflected gains in the West and the South, where sales went up by 22.4 percent and 0.6 percent respectively. Sales, however, tumbled 24.3 percent in the Northeast and were down 0.9 percent in the Midwest.

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