Buffet Bullish On US Housing

stefanlevine Real Estate , Uncategorized 1 Comment

Interesting strategic insight.-Stefan


Warren Buffett Just Made A Huge Bet On The US Housing Market

Matthew Boesler | Oct. 31, 2012, 11:13 AM |
Warren Buffet

Getty Images/Gabe Palacio

Perhaps the most bullish indicator for U.S. housing is Warren Buffett.

The legendary investor has been buying up real-estate brokerages

around the country as he bets on a housing turnaround.

Now, he is partnering with Brookfield Asset Management, a

Canadian real-estate investor, to more than double the size of

his brokerage business.

Bloomberg Businessweek’s Noah Buhayar has the details:

Berkshire’s HomeServices of America Inc. unit will be the majority

owner of the venture to manage a U.S. residential real-estate affiliate

network, according to a statement on the new company’s website. The

firms plan to offer a new franchise brand, Berkshire Hathaway Home

Services, starting next year. Brookfield’s network has operated under

the Prudential Real Estate and Real Living Real Estate brands.

Berkshire’s managers have been positioning the firm to benefit as the

U.S. home market recovers from its worst slump in seven decades.

The Omaha, Nebraska-based company has bought a brickmaker,

won the loan portfolio of bankrupt mortgage lender

Residential Capital LLC at auction and built its HomeServices

unit by agreeing to acquire real-estate brokerages in states

including Oregon and Connecticut.

The press release says the brokerages that will make up the new

company did a combined $72 billion in sales in 2011. That’s more

than twice the $32 billion in sales that Berkshire did in 2011 without

the new brokerages.

More from the release:

The combined networks of more than 53,000 Prudential Real Estate

and Real Living Real Estate agents generated in excess of $72 billion

in residential real estate sales volume in 2011, and operate across more

than 1,700 U.S. locations.

“Berkshire Hathaway HomeServices is a new franchise brand built upon

the financial strength and leadership of Brookfield and HomeServices,”

said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc.

“I am confident that these partners will deliver value to the residential

real estate industry, and I am pleased to have Berkshire Hathaway be a

part of the new brand.”

“The strength of the Berkshire Hathaway name, coupled with the

operational excellence of HomeServices and the franchising experience

of Brookfield, positions Berkshire Hathaway HomeServices® as a leading

real estate franchise in the U.S., building on our traditions of exceptional

client service and innovation. Brookfield is excited to be a partner in

creating a home for the best real estate brokers and agents in the country,”

said Bruce Flatt, Brookfield Asset Management CEO.

Buffett has been public about his bullish housing call for a while as he’s

built his residential real-estate brokerage business, but this is a big addition.

Read more: http://www.businessinsider.com/warren-buffett-brookfield-asset-managment-housing-2012-10#ixzz2C1MbVzJN

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1 question about “Buffet Bullish On US Housing”

  1. Joseph Finkelberg says:

    Great post.

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