Tags: Buffett | HomeServices | Brookfield | real estate

Buffett Bets on Housing Recovery Via Real Estate Brokerage Purchase

Friday, 02 Nov 2012 07:46 AM

Warren Buffet believes the U.S. housing sector is improving.

The Oracle of Omaha’s Berkshire Hathaway is teaming up with Canada’s Brookfield Asset Management to provide real estate brokerage services.

Brookfield purchased Prudential Real Estate and Relocation Services, Prudential Financial’s real estate brokerage and relocation services unit, in December 2011.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

The newly created Berkshire Hathaway HomeServices will combine networks of more than 53,000 Prudential Real Estate and Real Living Real Estate agents that generated revenue in excess of $72 billion in residential real estate sales volume in 2011 across more than 1,700 U.S. locations.

HomeServices and Brookfield have joint ownership of the new company, with HomeServices having a majority share. The company will be based in Irvine, Calif., and begin operations in 2013.

“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Buffett said in a statement.

“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.”

Buffett said recently that the U.S. economy continues to show signs of life despite a cooling global economy.

“It’s certainly better in the U.S. than it is in Europe. And in terms of the rate of decline in Asia, it’s reasonably steep. And we’re still inching ahead, but it’s inching,” Buffett told CNBC in October.

Housing is showing signs of life in terms of upticks in prices though at a choppy pace, but once the sector really begins to quicken its pace of recovery, other areas of the economy will display marked improvements as well.

“In the United States, actually, residential housing is picking up and we’ve been waiting for that for a long time, and that will have a significant impact,” Buffett said.

“And it hasn’t gotten to any big level yet, but our carpet businesses and brick businesses and all of that will come on with residential construction. And that has turned,” Buffett said.

“We’re selling a lot of furniture and carpet” right now.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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