New Real Estate Brand Coming Next Year: Berkshire Hathaway Home Services

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Another signal that the housing market is up for a rebound: Warren Buffet’s Berkshire Hathaway Inc. is expanding into the world of real estate. Formed with Brookfield Asset Management under Berkshire’s HomeServices of America unit, a recent report in Business Week says the new venture will be a network of real-estate affiliates under a new franchise brand, Berkshire Hathaway Home Services. The brand will launch early next year. Currently, Brookfield’s affiliate network operates under two separate brands, Prudential Real Estate and Real Estate Living.

Berkshire’s move is a response to market conditions, as it positions itself to benefit fully from a potential recovery of the real estate business. Executives in both companies cite low interest rates, good inventory numbers and home prices as the fuel behind the rebound from the worst slump to hit the home market in 70 years. “We have significant inventory shortage across the country” noted Ron Peltier, HomeServices Chief Executive Officer. “When you add the pieces up together with low interest rates, we see a housing market that will continue to improve.”

The numbers support their actions. Housing prices rose in August, up 2 percent from the previous year and the biggest gain since 2010. Similar gains also manifested in new home construction and real estate contract activity. Buffet himself attributes the recovery in prices to a return to balance between the supply of homes and the number of potential buyers. “That happens in different paces in different parts of the country, but you have seen a much better balance developing in recent months. And that’s why you’re seeing some pickup in prices.” He noted during a July 13th interview.

Buffet’s new company will make a strong debut as a market presence. With a combined network of more than 53,000 agents operating in over 1,700 US locations via its network of affiliates, HomeServices will gain exposure in important markets such as New York, Boston and Northern California. Under their current banners, HomeServices’s agents generated $72 billion in sales last year.

Hopefully Buffet’s optimism will pan out. In addition to rising home prices and overall growth in the housing industry, financing conditions have rarely been better for potential home buyers. With borrowing costs at near record lows for mortgages, the time may be right for a home purchase.

Nat Criss is one of the owners of Nat has an extensive background in mortgage finance, real estate, and online marketing. Nat was previously the Marketing Director for AAXA Discount Mortgage, a mortgage company which conducted business in 26 states, and currently helps run CMG Equities, LLC and ILM Marketing. My Google Profile+

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