Reports that Berkshire Hathaway may soon sell its real-estate brokerage business sparked speculation that Warren Buffett may have lost faith in the struggling industry. Compass is in advanced talks to buy Berkshire’s HomeServices of America , and a deal could come together soon, the Wall Street Journal said Thursday, citing people familiar with the matter. HomeServices CEO Gino Blefari sent out a note to employees after the WSJ report, saying no such sale is under consideration. Still, the news of a potential sale sent a signal that perhaps the 94-year-old Buffett, the ultimate buy-and-hold investor, has soured on a real estate industry plagued by low sales, limited inventory and stubbornly high prices. “He won’t sell unless he sees a continued drain. He sold the [news]papers when he saw no future without consolidation,” said Bill Stone, chief investment officer at Glenview Trust Company and a longtime Berkshire shareholder. Throwing in the towel When Buffett invested in newspapers including the Omaha World-Herald and Buffalo News in the 1970s, he thought their franchises were impregnable. But by the early 2000s his view on the industry darkened as shrinking advertising revenue and the transition to digital platforms destroyed profits. He eventually sold his 30-odd newspapers in early 2020. “We’re more reluctant to sell them than most people,” Buffett at Berkshire’s annual meeting in 2009. “If we made the right decision going in, we like to ride that a very long time… But if the competitive advantage disappears, if we really lose faith in the management, if we were wrong in the original analysis — and that happens — we sell.” Now, maybe the same sort of throwing in the towel is coming for real estate services. HomeServices was absorbed by Berkshire in a 1999 deal to buy utility giant MidAmerican Energy, which then owned the real estate broker. As a result of that history, HomeServices, now an umbrella business for 48 brand names and 37,700 real estate agents, has operated as a subsidiary under Berkshire Hathaway Energy (BHE). Slowdown signs HomeServices remains a miniscule part of Buffett’s conglomerate, generating $4.4 billion in revenue in 2024, compared to $26.3 billion in revenue for BHE and $371.4 billion for Berkshire as a whole. Still, recent years have brought clear signs of a slowdown at HomeServices. The unit suffered a net loss of $113 million in 2024, reversing a $13 million profit in 2023 and $100 million in net earnings in 2022. Berkshire attributed the profit slump to charges in connection with ongoing real estate industry litigation. In April 2024, HomeServices agreed to pay $250 million to settle lawsuits nationwide claiming that longstanding practices by real estate brokerages forced U.S. homeowners to pay artificially inflated brokerage commissions when selling their homes. Additionally, Buffett noted in the 2024 Berkshire annual report that the real estate brokerage business continues to be hurt “by the availability of homes for sale and high home prices.” Business tied to U.S. housing continues to soften as potential buyers face higher mortgage rates, elevated prices and a limited number of new listings. Pending home sales dropped 4.6% in January to the lowest level since the National Association of Realtors began tracking the metric in 2001.
Buffett’s Berkshire may sell its real estate business. What it means
