Billionaire Warren Buffett is selling his real estate empire?

Warren Buffett's latest move is a clear warning that the real estate market is in serious trouble.

Amid rising mortgage rates and falling home sales, Warren Buffett's exit from the real estate market is a warning sign for the US housing market - Photo: NowBam/Economictimes

Billionaire Warren Buffett, legendary investor and chairman of Berkshire Hathaway, is making waves in the real estate sector, according to the US newspaper Economictimes .

The latest reports say Mr. Buffett is considering selling HomeServices of America, one of the largest real estate brokerages in the United States. The move comes as the market struggles with rising mortgage rates, falling sales and financial instability.

Buffett rarely sells businesses unless there is a good reason. Is this a sign that the market is in trouble? Why is Warren Buffett selling his real estate business at this time? Economictimes asks a series of questions.

Berkshire Hathaway is reportedly in talks to sell HomeServices of America to Compass, a real estate giant known for its aggressive expansion.

HomeServices, which operates through brands such as Berkshire Hathaway HomeServices and Real Living, has an extensive network of more than 5,400 employees and 820 brokerage offices.

The urgency of this potential sale may stem from HomeServices' financial difficulties.

HomeServices of America reported a massive $107 million loss in 2024. A major factor behind the move was a $250 million settlement related to a real estate commission lawsuit.

With market conditions tightening and profits falling, Buffett may be making a strategic exit.

The US real estate market is under severe pressure, with soaring mortgage rates (driven by the Federal Reserve's rate hikes) slowing home sales significantly.

Buffett's potential exit from the real estate brokerage industry signals he expects prolonged setbacks.

If one of the world's most successful investors steps down, should others follow? What does this mean for home buyers and sellers?

For home buyers, the landscape is increasingly difficult. Mortgage rates have spiked to 6.8% for a 30-year fixed loan, nearly double the low rates seen in 2021. Higher borrowing costs are pushing many potential buyers out of the market.

On the other hand, sellers are facing declining demand. Homes are sitting on the market longer, forcing prices to drop in certain areas. The days of speedy auctions and soaring home prices may be coming to an end, at least for now.

Are we heading for a real estate crisis?

A market crash is unlikely, but worrying signs are mounting. Housing affordability has hit a multi-decade low, lending standards are tightening and investor confidence is waning.

These factors together paint a picture of a fragile housing sector. Buffett's move could be an early warning sign that things could get worse before they get better.

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