Warren Buffett may lose faith in real estate as Berkshire reports losses

In the United States, reports emerged on March 16, 2025, that Berkshire Hathaway might sell its real estate brokerage business, HomeServices of America, amid concerns about the real estate industry's stability. HomeServices, which became part of Berkshire in 1999, is currently facing significant challenges, resulting in a net loss of $113 million in 2024. This figure came after a profit of $13 million in 2023, and it highlights the difficulties stemming from litigation and ongoing issues in the real estate market, such as high prices and low inventory. The potential sale of HomeServices raised eyebrows, particularly about Warren Buffett's confidence in the long-term viability of the brokerage sector. Buffett, a legendary investor known for his buy-and-hold philosophy, has historically shown reluctance to divest from businesses in which he sees potential. However, signs indicate that even he may be re-evaluating such commitments in the face of an industry plagued by problems. Industry experts speculate that the impending sale could signal Buffett's waning optimism about real estate, which has been struggling due to low sales and inflated prices. For instance, pending home sales fell 4.6% in January to their lowest levels since tracking began. Such data suggests a broader concern that may be influencing his decision-making as it relates to HomeServices. The broader implications of these developments raise questions about Berkshire Hathaway's future direction and the real estate market as a whole. If Buffett moves forward with the sale, it could further reflect his belief that the current landscape offers limited potential for recovery. The once-strong position of Berkshire's subsidiary may be increasingly viewed as a financial burden rather than a growth opportunity, leading to a significant shift in his investment strategies within the sector.