Thanks to its white-hot buying spree, Berkshire Hathaway’s real estate brokerage reported $1.3 billion in second-quarter revenues, up 33.2 percent year over year. Revenue from the first half of 2018 topped $2 billion, “primarily due to recent business acquisitions,” the company reported Saturday.
But like other brokerage companies, the Omaha, Neb.-based conglomerate — which operates the HomeServices of America brokerage franchise — said profits slid 5.3 percent to $107 million. That’s compared to $113 million in profits during 2017’s second quarter. For the first half of 2018, meanwhile, profits were down 16 percent to $97 million.
As of 2017, HomeServices was the second-largest real estate brokerage in the country, having sold $125.4 billion worth of real estate. Only NRT — the division of Realogy that includes the Corcoran Group, Sotheby’s International Realty and Coldwell Banker — had a higher sales volume, with $178.2 billion in sales.
Berkshire Hathaway purchased HomeServices of America in 2000, but it’s only in the past two years that the company has been on an acquisition tear.
Last year, it scooped up Long & Foster Cos., a 230-office firm with $31.1 billion in sales in 2017. Earlier in 2017, Berkshire Hathaway purchased Westchester-based Houlihan Lawrence, a firm with 30 offices and $6.7 billion in sales in 2016, the most recent year for which sales figures are available.
And Buffett’s hungry for more.
“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 shareholders’ letter last year. “That leaves 97 percent to go.”
Its biggest competitor has taken notice. Last week, Realogy said it was going to ramp up recruitment and launch at least one more franchise brand in 2019.
“We are not satisfied with NRT’s recent direct financial results,” CEO Ryan Schneider said on an Aug. 3 earnings call. Realogy’s revenue in the second quarter rose 2 percent year over year to $1.82 billion. Its net income rose 13 percent to $123 million.