The Orange County Register, Calif., Jonathan Lansner column.

Publication: The Orange County Register (Santa Ana, California) (via Knight-Ridder/Tribune Business News)

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COPYRIGHT 2005 The Orange County Register

Byline: Jonathan Lansner

May 10--BUFFETT FINDS PARABLE IN SALE: A dilly of a bearish signal.

Legendary investor Warren Buffett sold a Laguna Beach home, then cited the sale as an example of the nation's overheated real estate markets.

In February, the world's second-richest man sold a 51-year-old, two-bedroom, ocean-view house in Laguna's Emerald Bay neighborhood for $3.5 million.

The result is signature Buffett. He bought this home practically at a market bottom in 1996 for $1.05 million, according to county records.

Buffett, 74, still owns another nearby home in Laguna -- one he bought for $150,000 in 1971. Buffett said 18 months ago this house was worth $4million -- but make that $5.2 million today, based on appreciation rates for O.C. homes.

So why sell?

Buffett, who resides in Nebraska, isn't short of cash. Forbes magazine estimates his net worth at $44 billion.

This is a largely risk-averse guy who's had a great knack for so-called "value investing," Wall Street lingo for bargain shopping.

Buffett's wisdom is dispensed every year at the annual meeting of the company he runs, Berkshire Hathaway of Omaha, Neb. At the most recent gathering on April 30, he discussed his home sale as part of an analysis of U.S. home prices.

According to a partial transcript of the...

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