Remember a few weeks ago when Warren Buffett announced that he was buying stocks again, that the bargains were just too good to pass up? Would it surprise you to know that even though not well-publicized, Mr. Buffett apparently thinks the same about owning a real estate brokerage today?
While monitoring real estate industry news feeds this past month, I spotted a hidden bit of PR buried among the headlines which no major outlets picked up on, but that which I found extremely interesting. Despite all the doom and gloom coming out of Washington these days, over the past three weeks, Cincinnati-based Huff Realty announced their expansion into three new market areas. Now I’ll admit, I’m not from Ohio and I hadn’t heard of Huff Realty before, but the stories caught my eye nonetheless by reason of the fact that there were three such announcements in as many weeks, and because of that key word “expansion”. So delighted with the news that something other than foreclosures was “expanding” in our industry, I dug a little deeper. Sure enough, these guys were serious! Lots of money invested in acquiring and expanding their reach into Kentucky and Indiana. Wow.
Let me summarize it in this way: A major real estate broker in Ohio decided in the middle of our housing crisis, when housing was at its lowest historic levels, to invest in the future and expand their business into two neighboring states, now!
If that strikes you as odd, or going against the grain, let me give you a couple more key details that may help explain the move. Huff Realty is part of Home Services of America. And Home Services of America is a Berkshire Hathaway company. So the bottom line is this: Warren Buffett thinks that putting money into owning and expanding a local real estate brokerage is a smart play.
What does that mean to us? Well, if you look at Mr. Buffett’s track record over the past half-century, he seems to be pretty good at predicting “value.” If you just mirrored his investments over the past 5 years in publically traded stocks, you’d have beaten the stock market averages and benchmarks by over 300%.
Last month Mr. Buffett made news by announcing he was investing millions buying beaten down financial companies, and increasing his stake in Conoco Phillips – a loud statement that the world’s investors took notice of. I’m glad to know the sage of “value” is also quietly making a statement about our industry as well.
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