I noticed two articles recently about the real estate brokerage business including quotes from Ron Peltier, chief executive of HomeServices America, owned by Berkshire Hathaway:
The second is a more general article in conjunction with the Berkshire Hathaway annual shareholders meeting:
Some interesting quotes from the articles:
"The single most-challenged sector of the market is the first-time home buyer," he said. "Historically, they make up 40 percent of the existing home market. In the last 18 months to two years, it has been 27 to 28 percent. Twelve percent of the market has been missing. It's troubling."
HomeServices is the second-largest U.S. independent real estate brokerage, and part of a Berkshire unit that was on Wednesday rechristened Berkshire Hathaway Energy.
U.S. home resales in March fell to a 1-1/2 year low, dropping to an annual rate of 4.59 million units according to the National Association of Realtors.
[In our market there was a drop in the number of sales for March this year compared to last year, 439 vs. 489. That's the lowest for March since 2009. For the first quarter of 2014, the number of sales was 1090, just slightly lower than the first quarter of the previous two years.]
In the first quarter, Berkshire reported a $24 million pre-tax loss from "real estate brokerage and other" items within Berkshire Hathaway Energy, as spending rose on employment and marketing. Revenue rose 21 percent to $405 million.
Some of that extra marketing was to rebrand local brokerages as Berkshire Hathaway HomeServices. That puts the Berkshire name on "For Sale" signs, and Peltier said it is helping business.
"The brand is golden," he said. "We have received an incredible number of comments from every market we've launched in that the values associated with the Berkshire brand translate into values that consumers look for: integrity, honesty, trust, value."
As he sometimes does, Warren Buffett likes to welcome the 40,000 visitors to the Berkshire Hathaway annual meeting today with a last minute deal, this time a $2.8 billion acquisition of an electric transmission company in Alberta, Canada, that will further build out the holdings of Berkshire Hathaway Energy.