Warren Buffett didn’t have much luck in the blockbuster-deals department last year, but his real estate brokerage business is on a tear.
HomeServices of America Inc., an operation that Buffett said he “barely noticed” when Berkshire Hathaway Inc. bought it in 2000 as part of an electric company, has grown steadily through acquisitions to become the second-largest residential brokerage owner in the U.S. Now, after the purchase last year of one of its biggest rivals, Long & Foster Cos., an even loftier perch is within range.
The deal helped catapult HomeServices’ volume by more than 80,000 “sides” in 2017, a 34 percent jump from the prior year, according to a new ranking from Real Trends, a data provider for the industry. (There are two sides to each home sale a buyer and a seller and one brokerage may represent both sides.) That puts the company within striking distance of the top residential brokerage in the U.S., Realogy Holdings Corp.’s NRT LLC unit, which operates under brands such as Coldwell Banker and Sotheby’s. In terms of transaction values, NRT still enjoys a significant lead.
Make no mistake Buffett is fixated on being No. 1.
“Despite its recent acquisitions, HomeServices is on track to do only about 3 percent of the country’s home-brokerage business in 2018,” he wrote in his annual letter to Berkshire shareholders. “That leaves 97 percent to go.”