How about buying a house in Omaha instead of Mumbai?

There are a lot of blog posts and comments over annual treat for finance professionals- Warren Buffet’s letter to shareholders. It is one of the most awaited events.

This one is also full of anecdotes Buffetisms:

Some major financial institutions have, however, experienced staggering problems because they engaged in the “weakened lending practices” I described in last year’s letter. John Stumpf, CEO of Wells Fargo, aptly dissected the recent behavior of many lenders: “It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.”

You may recall a 2003 Silicon Valley bumper sticker that implored, “Please, God, Just One More Bubble.” Unfortunately, this wish was promptly granted, as just about all Americans came to believe that house prices would forever rise.

He explains the great, good and gruesome business

The great one pays an extraordinarily high interest rate that will rise as the years pass. The good one pays an attractive rate of interest that will be earned also on deposits that are added. Finally, the gruesome account both pays an inadequate interest rate and requires you to keep adding money at those disappointing returns.

Before he begins to explain how much he earned from his 4 lines of business (insurance, utilities, manufacturing and retail, finance and finance products), he writes:

The best anecdote I’ve heard during the current presidential campaign came from Mitt Romney, who asked his wife, Ann, “When we were young, did you ever in your wildest dreams think I might be president?” To which she replied, “Honey, you weren’t in my wildest dreams.”

🙂 

He goes on to criticize overstated reportings by public companies and defends sovereign wealth funds.

And finally, he says the annual meeting will be on May 3 2008. And the centre would have many avenues for shopping. What caught my eye is this

This year we will again showcase a Clayton home (featuring Acme brick, Shaw carpet, Johns Manville insulation, MiTek fasteners, Carefree awnings and NFM furniture). You will find that this 1,550- square-foot home, priced at $69,500, delivers exceptional value. And after you purchase the house, consider also acquiring the Forest River RV and pontoon boat on display nearby.

I just checked the website of the Clayton and came across some superb homes.

Well, now the main point. If you calculate the per square rate of this house it costs just about Rs. 1793.5 per sq ft! And that too with some basic furniture.

You wouldn’t get a house at these rates in Mumbai and would have to go really to far-0ff places. Like let us compare the ratesacross the 3 railway tracks . You wouldn’t get a house for this rate as far as Panvel (the last stop on Harbour Line) and might get one beyond Ambernath (on Central Line) and Virar (on Western Line).

So, those having a house in Mumbai and are looking to invest, Omaha could be a good option; prices are rock bottom in US and one can gain from appreciation over the years.

Moreover, it might also just bring some respite to the Mumbai property market. And address demand-supply problems which a visitors have commented on in this post.

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6 Responses to “How about buying a house in Omaha instead of Mumbai?”

  1. » How about buying a house in Omaha instead of Mumbai? Says:

    […] Read the rest of this great post here […]

  2. condos Vancouver Says:

    Definitely it is the right time for the first-home buyers to obtain a favourable deal and move into a picturesque house. That`s true that the market is now in decline but that also induces that the people are not as eager to sell their houses as its value is not remarkable anymore. This time is really beneficial for young couples eager to move into their own home, especially in our city the Vancouver condos became a very favourable option to live for the younger generation. So it seems that we don`t have to own a house in Mubai..

  3. HmmBut Says:

    There are houses for $100 in Detroit.

    http://bigpicture.typepad.com/comments/2008/02/detroit-housing.html

  4. Assorted Links « Mostly Economics Says:

    […] Mostly Economics Mostly on research work in Economics and Financial System with focus on India « How about buying a house in Omaha instead of Mumbai? […]

  5. Amol Agrawal Says:

    HmmBut, Thanks for that information. 100 dollars for a house in Detroit!!

  6. Ashish Says:

    hmm I think those are manufactured homes so that pricing (69k USD) is just for the house. you still need to find a place to put it!

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