When Warren Buffet Speaks – We Listen… Buffett: There is NO Housing Bubble

Hello readers!

When Warren Buffet speaks – we listen.  I just had to post this article right away.  And I would love to know YOUR thoughts on the Bay Area Housing Market….

 

Buffett: There is No Housing Bubble

 

As home prices continue to surge upward, many in the industry are beginning to wonder if a housing bubble is imminent, or worse, if yet another financial crisis is in the making.

Warren Buffet, Chairman and CEO of Berkshire Hathaway, a multi-national conglomerate holding company, believes that the chances of home prices collapsing are very low, according to a recent report from Fortune by Stephen Gandel.

Although now may be a good time to buy a house, it is not as good a time as it was four years ago, Buffett stated at the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska. Fortune reported that Buffett thinks the chances of housing prices collapsing are very low.

Fortune reported:

“I don’t see a nationwide bubble in real estate right now at all,” said Buffett.

Buffett made remarks at the annual meeting Berkshire Hathaway, which took place on Saturday in Omaha. “In Omaha and other parts of the country people are not paying bubble prices for real estate,” says Buffett.

Although home prices continued their upward trek all over the country, they are doing so at a much slower pace, according to data on the recent U.S. House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA).

The report showed a national 0.4 percent month-over-month increase from January to February, and a 5.6 percent annual jump between February 2015 and February 2016. January’s HPI report showed a 0.5 percent increase, which was revised downward to reflect a 0.4 percent increase.

The S&P/Case-Shiller U.S. National Home Price Index (HPI) found that home prices rose for the 43rd consecutive month in November 2015. According to the HPI report, home prices rose 5.3 percent year-over-year in November, slightly up from the 5.1 percent increase recorded in October 2015.

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Sales of existing homes were up 6.5 percent in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market.”

The topic of bubbles forming in the housing market is something that has been thrown around for quite some time. As home prices soar to new heights—with no sign of decline—housing bubbles appear to be popping up in many markets and may be here to stay, according to Zillow’s Home Price Expectations Survey.

“Without 20/20 hindsight, it’s difficult to identify bubbles as they’re happening, but it is very clear that nationally we are not seeing a return of the conditions that caused the last national bubble,” said Dr. Svenja Gudell, Zillow’s Chief Economist. “Tighter lending restrictions today mean we aren’t seeing buyers get loans they realistically can’t pay back, like we did in years past. It’s significant that some experts are starting to worry about bubble conditions, but in my opinion, there’s no real danger of a severe crash like the one we all remember from the last decade.”

My two cents – talk of a housing bubble is a buzz here in the San Francisco Bay Area.  Though no one has a crystal ball – and as much as I want to tell my home buyers to hold tight – prices will come down – I cannot because I don’t see that in the forecast.  

Here is what we are experiencing the San Francisco Bay Area – We have had a BOOM in population due to job growth.  Most are in the tech industry – but we also have a strong Bio-Tech job market.  So we have a great job market – and yes I am taking into account the lay offs in Silicon Valley – but we also have very low inventory and very high demand for the past couple of years.  Loans are harder to get – meaning we cannot expect a crash due to bad loans.  In fact, the interest rate is still low though there is talk of raising it.  And while interest rates are low – borrowed money goes a bit further.  The only sign I see is the stock market.  With its drops – some of the cash buyers were counting on has disappeared – for the moment.  But that’s not enough to stop the housing market.  

I know my selling clients are figuring out ways to sell their home now.  And I see my buying clients getting discouraged with the pace of the market.  But if there is only one piece of advice I can bestow to you now is this – if you can and want buy a home in the San Francisco Bay Area – do it now.  Even if there is a slow down in the market, even if prices level off, historically – since the dawn of time, Real Estate has always recovered and always at a higher price than before the fall.

I don’t see a crash coming.  I do see a market adjustment as buyers dictate what they are willing to pay for a home.  And as money gets tight and the dream of home ownership stays strong – we will see a change.  But I wouldn’t hold my breath for a crash.  

I read this article at: http://www.dsnews.com/news/05-02-2016/buffett-there-is-no-housing-bubble

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Testimonials for The Caton Team, Sabrina Caton and Susan Caton

Testimonials From Our Clients

 

Sabrina and team are fantastic.  Responsive, honest, transparent and efficient.  She’s also well-connected in the real estate community on the peninsula – whether buying or selling, you can’t ask for better representation.  I highly recommned her!

– Kenny H.

 

To future clients of The Caton Team,

The Caton Team is made up of Susan Caton and Sabrina Caton, or as I like to refer to them as the Dynamic Duo of Real Estate. They are trustworthy, honest, straight-forward, and experts in the real estate business. I might be a little biased, because of my friendship with them, but nothing will test a friendship more than the process of buying and selling a home. As everyone knows when you sell your home you want the most money for the least amount of effort and you want the process to be quick and smooth. The Caton Team will make sure you have all of the necessary information and knowledge to understand how to stage your home and what the process will be along with a realistic timeline of what you can expect. If you follow their directions and listen to what they say, your home selling experience will be painless and quick. For us this ended up being less than a week with our home selling for more than what we expected. The entire process from filling out the required paperwork to negotiating went smoothly and was overall painless on our end. At the end of the day we got more than what we wanted and were in a great position to start hunting for a new home.

This brings me to how The Caton Team helped us buy a new home for what we wanted, while making sure that we got the home that we wanted. Since we had already bought and sold our first home with The Caton Team, using them again to buy another house did not require much thought, actually required no thought. We went into the process wanting the best of the best in the best location, because who does not want that for themselves? They were kind enough to listen to our wants and desires and showed us what we could afford in the areas we were looking. It took a few homes to realize that our expectations were not in sync with the market, because currently in early 2015 homes are going like hot cakes and for more than what they are listed at by a fair amount.

This is when we sat down again and started looking at other areas that were just as nice, but we had ignored initially. The important part here is while they mentioned this information early on, they allowed us to realize it on our own that we needed to look outside of our ideal areas if we wanted our dream house. Once we realized what they were saying we expanded our search and found the home that we wanted. After our initial open house we contacted The Caton Team and informed them that we found the home that we wanted. This is when The Caton Team sprang into action, they immediately started requesting all of the disclosures from the seller’s agent and contacted the seller’s agent to gain any additional knowledge that might not be in the supplied paperwork. They then shared this information openly with us, as one would expect, and started laying down the groundwork of what we would need to do if we truly wanted this house. They supplied us with the tools necessary to make an informed decision and provided us with comparable sales (COMPS) in that particular area, so that we would have an idea of what houses were selling for and where the market was heading (spoiler alert, market was only going upwards). Their attention to detail and understanding of the market allowed us to make the best offer we could, while not overbidding or underbidding and making sure that we would have our offer accepted. As you have already guessed, our offer was accepted almost immediately and we are now homeowners of a home that we wanted in an area that is ideal.

If you have made it this far, then you realize why The Caton Team is really The Dynamic Duo of Real Estate. They make sure you are provided with the proper tools and information to make the best decision for yourself. They will work tirelessly with you and will not be a 9-5 agent, they will be honest, trustworthy, and straight-forward. You will not feel like you are getting the short-end of the deal and at the end of the day you will feel great about your decision to work with The Caton Team.

-The Liere Family

 

“I worked with Sabrina and Sue a few years back and they were so professional. I was going thru a divorce and had to sell my condo. I was beyond upset. (Not because of the divorce but selling the condo) haha… Thru this difficult time they were so amazing and made me feel at ease. The housing market at that time was not the best but they did their best to make sure I got a good deal.  The condo wasn’t on the market for too long and I was able to sell it for a decent price. Thank you to both for making that transition in my life a little easier. Definitely will be using them again if and ever I can buy again.”

-Elena

 

“We had a great experience buying a house through the Caton team. Sabrina and Susan were patient in answering our many questions, and helped guide us in the offer process to help win a bid on our second offer even in this crazy market! They are easy to get in touch with over email, text, or phone, and detail oriented to make sure nothing fell through the cracks. We’d highly recommend them!”

-Katherine

 

Hi Susan and Sabrina,

I just thought I’d take a moment to write you both to say how much of a pleasure it has been to once again have had another successful property transaction come to fruition with you both at the helm (yay, three now)!

I can’t say enough how Victor and I have been so happy you’ve been our representatives in both our buying and selling transactions, and that your dedication and hard work, creativity and professionalism have always made a world of difference all throughout the process of buying and selling our homes. From the smallest details like your fantastic web page ads and captioning to your weekly and continuous updates and presence at the property for showings and repairs. You’ve left nothing to chance!

It’s clear that experience counts, and your research and broad-based knowledge of the local real estate and larger markets in general, have always provided us with a solid backdrop from which we could make our decisions. You’ve always provided us with good information, solid recommendations, and I’m grateful that we had you both as our representatives.

Additionally, I want to say on a personal note, that you are both so considerate and thoughtful, and I always feel that we are in good hands when you’re on the job.  Thank you again for this recent and very successful sale of our property, and we look forward to our continued relationship with you in future transactions.

I did not have your Broker’s contact information, but if you would please forward him/her this e-mail, I’d appreciate it, because I’d like them to know that you have permanent fans!

Thanks again,  Helen and Victor

 

“Susan and Sabrina, The Caton (Dream)Team –

Thirteen years ago, we met Susan Caton who so kindly helped us find our first home in the Bay Area.  She was mindful of our budget and attentive to our wish list.  We landed a great starter home fit to our needs and close to work.  In 2012, when it came time to relocate into a neighborhood with great schools, we once again called upon Susan, who now was partner with her daughter-in-law, Sabrina, to find the right house for our growing family.  First, Susan and Sabrina helped sell our house within 2 weeks time at a price within our expectations.  Then, they delivered BIG by helping us find our next dream home in a competitive market with little time to spare knowing Facebook millionaires would soon bring stiff competition to the housing market.  All along, even when our first two offers fell through, Susan and Sabrina helped us keep our focus and always had our best interest in mind.  Settling for less than our hearts desired was not the answer, and our patience combined with our trust in Susan and Sabrina paid off when we stumbled upon our dream home.  We can honestly say that working with The Caton Dream Team has been a true pleasure as it has enabled us to find a wonderful place to call home, not only once, but twice.  When the time comes, we will gladly call upon their services again, and we highly recommend them to anyone looking to find their first or next dream home.”

– Fredric and Heather R.

 

“I recently worked with The Caton team (Sabrina and Sue) to purchase my first home. I was referred to the team by a co-worker who had just purchased a condo with them. He had a great experience, and recommended them for their honesty, responsiveness and availability (even at night and weekends). I found this assessment to be 100% true.

I first met Sabrina and Sue when I was interviewing realtors. They recommended I come to their office for the interview. They were the only ones to recommend this, which already set them apart in my mind. During the interview they shared their process and approach and how our relationship would work. I decided to work with the Caton team for several reasons. 1) A great referral 2) Their open and honest personalities 3) Their sincere concern that I find exactly what I am looking for 3) Their combined years of experience and specialization in the peninsula.

After our first meeting, they set up their home search for the criteria we discussed. Part way through the search, my criteria changed, and they updated the search for the new criteria. Periodically, they would check in to see if I saw anything that I liked. We narrowed the search by going through what I liked and disliked about each listing that I reviewed online.

Sabrina and Sue answered all of my questions along the process. They came to the home inspection and to sign papers at title company. The title company representative that I signed papers with commented on how lucky I was to have my realtors there, looking out for my best interests, as a lot of first time buyers come alone, signing papers they don’t understand.

After receiving keys to my new home, the Caton team continued to support me. They referred me to painters their colleagues had worked with and found multiple contractors who would do the work I needed.

Sabrina and Sue are really easy to work with. It’s like talking with friends when I reach out to them. They are very approachable, trust worthy and hard working. They always answer questions I have or research to find the answers if they do not have them right away. I highly recommend them and will use them again for future real estate needs.”

– CJ T.

 

“The Caton team is awesome! Susan and Sabrina were an awesome fit for my husband and I as first-time homebuyers, but I highly recommend them for anyone at any stage of buying a home. They went above and beyond to help us locate a wonderful home and took us step by step through the often confusing short sale process. It felt less like we were working with realtors and more like we were working with good friends or family! Thank you, thank you, Sabrina and Susan!”

-Marie B.

 

“If anyone can get it done quickly it would be you two. By far the best Realtors west of the Mississippi.”

– Josh L.

 

“The Caton Team is A-Number-One in our book.  Susan and Sabrina are consummate Pros.  They do exhaustive research, they know how to price a home in today’s competitive market, and they know how to stage a home for maximum buyer appeal.  They’ve sold two homes for us, and we’re completely satisfied with everything they do.  You go, girls!”

-Russ & Elena H.

 

“I met Sabrina and Susan during our recent rental home search.  As we were not prepared for a move (current homeowners informed us that they were selling the house after 1 year of listing the home as a rental) we needed to act quickly and diligently to find our new home.  My initial communications were with Sabrina as she was hosting an open house.  Her emails were prompt and friendly and I got to know her a bit through email.  When I met up with her for the open house, she was just as friendly in person as was her partner, Susan.  They were welcoming throughout the process and provided wonderful thorough follow up on behalf of the homeowner.  Susan made herself available on a Saturday morning for the signing of the lease and has been in contact with us as we prepare for the move-in.  We have very much enjoyed working with the Caton Team and would recommend them for rental guidance and hopefully in the near future, home ownership!”

– Angela J.

 

“The Caton team has helped me find my perfect condo within a month of looking! And then later found me great tenants to rent it out. They work quickly and are very professional. Plus, these are just a pair of wonderful women to be around. They are very trustworthy and have their Clients’ best interest in mind. I will be using them again for all my real estate needs, and I recommend them to everyone else! Thank you so much!”

-Caitlin G.

 

“The Caton Team are the best. They are very easy to work with and know what they are doing. Made a very stressful time much easier! I would recommend them to all. First time buyers and people that have sold many times will enjoy working with these wonderful ladies!”

-Chris & Gary C.

 

“The Caton Team has helped us many times. Susan and Sabrina are wonderful and we will use them again when the time comes. They know everything about the bay area and never pressure you about making decisions. We couldn’t ask for a better team.”

-Elisa D.

 

“I’m pretty sure without The Caton Team we wouldn’t have been able to buy our house. We started looking right before the housing market crashed and was going back and forth on qualifying for a loan.   They made it happen-it’s a long story and I can make short and sweet. Please use The Caton Team for you house buying needs!  Really!”

– Nisi C.

 

“I can’t say enough about what an incredibly professional job Sabrina did; she went above and beyond the call of duty! We would not be in our house today were it not for her tireless efforts. She’s so knowledgeable and works tenaciously for her clients. 
Thank you Sabrina!

-
Rip R.

 

“Great working with you guys!”

-Aaron B.

 

“I have worked with many realtors during my 15 years as a mortgage broker and Sabrina Caton is by far one of the best real estate agents I have ever had the pleasure of working with on a number of purchase transactions over the years. She is upbeat and personable with a great sense of humor. She consistently works with her clients best interests in mind and is not afraid to tackle the tough deals. I have personally seen her negotiate to lower the purchase price by $25,000 after the contract was already signed when the buyers’ appraisal came in below the purchase price. You can count on Sabrina for high energy, professional real estate services!”

-Melanie Flynn – Windsor Capital

 

“Susan & Sabrina did an excellent job, I am very happy.  I highly recommend them.”

– Heidi & Robert M.

 

“Susan & Sabrina were great, very helpful, and understanding.  They were never pushy and made sure we were making the right choices at all times.  We would use them again for our next property purchase.”

– Anthony D. & Elisa L.

 

“Susan & Sabrina did a wonderful job, they are easy to communicate with, they were willing to put in extra time and work in getting our house ready to sell.”

– Kathy & Rodney H.

 

“I knew I wanted to work with Susan   immediately because she actually         listened to our needs, and gave sound, practical advice and information without a sales pitch. I would recommend her to anyone. She was absolutely helpful and made the whole thing easy and painless. I didn’t worry about anything as long as she was working on it.”

– Alicia S. and John G.

 

“Sabrina did an excellent job, she went above and beyond from the beginning to the end of the transaction making sure we understood every detail. She made things very easy on us – we appreciate all her hard work. We used them for both our real estate deals.”

– Kathy & Rodney H.

 

“When we need to sale our home – we definitely will call them again!”

– Loyda C. & Carol J.

 

“We loved working with Susan. I feel I have gained a new friendship. She was totally honest and trustworthy. She made selling our home a pleasant                   experience.”

– Ken & Elain S.

 

“Susan went above and beyond what she had to do. She was the only help I had getting my parents home cleaned and emptied so I could sell. I live in           Sacramento and didn’t have the time to get down to San Carlos. She truly was a “God Send”. She is FABULOUS! I can’t say enough about her! Please know you have one hell of a woman working for Prudential. Please make sure she receives kudos for a job well done!”

– Andrew R.

 

“Susan was always available to us, providing information and assurance during the selling process of our home. Thank You!

– Leo & Carlotta O.

 

“We felt very relaxed and trusted their personality.”

– William & Helen G.

 

“They did an excellent job and we would recommend them!

– Steve & Stacy G.

 

“Thank you – Flawless Service!”

– Danielle C. & Thomas G.

 

“Very honest.”

– Fredric & Heather R.

 

“I will recommend them to all my friends and family.”

– Diane S.

 

“We wanted to work with Sabrina. She was wonderful. She put up with lots of emotions / family dynamic around the sale of this home, as it was our families house. I appreciated her sensitivity and solid knowledge. We would be happy to work with her again and pass along any new clients as well.

– Nancy R.

 

“I highly recommend them!”

– Derek H.

 

“Susan helped us so much. She       advised us and “rode” with us though the entire ordeal. She is a very “real” person and shares concerns. She        advises and makes one feel extremely comfortable. I would recommend her to another person unconditionally. She is an excellent agent who goes above and beyond the call of duty.”

– Russ & Elena H.

 

“They were great. They made the     entire process as fun and easy as it could be. Thank you!”

– Matthew S.

 

“Susan was extremely helpful in   making our first move in 44 years painless. It was a major undertaking. Thank you!”

– Betty C.

 

“Very thorough. Informed me of the newest listings. Made intelligent     recommendations and opinions on listings without being pushy. The attention given to me made me feel as if I were the only client. I am extremely satisfied with the service.”

– Toshinari K.

 

“They were very professional and helpful. We could not complete the   transaction without them.”

– Takeshi & Nana M.

 

“We selected Susan over two other agents because we liked her better.”

– Daniel S.

 

“EXCELLENT JOB! Lots of support throughout the process! Great             personalities and professionalism! Very responsive to our concerns during the sale – thank you!”

– Mike & Lynn A.

 

“Sabrina is a highly effective real-estate agent. She has in-depth of knowledge of the market, strong negotiation skills and provides highly personalized service…she really listens to the needs of her client and delivers based on those needs.”

– Elif S.

 

“I was impressed with the attention to detail throughout the sale process. True Professionals!

– John K.

 

“We were very happy with Susan as she helped us through a difficult situation. Thanks is just not enough to say for what she did!”

– Donald & Roseanna M.

 

“Definitely an asset to your company!”

– Rosemary P.

 

“They are such real / genuine people. I felt I could lean and trust them               particularly with some very important but difficult to understand questions. They are WONDERFUL!”

– Patricia P.

 

“Susan has impeccable integrity, what a great individual. Thank you for a         wonderful transaction.”

– Pamela G.

 

“What a great experience. I live 4 hours away and shopping for rentals is not easy. The Caton Team made my shopping experience less stressful. Always ready to answer any questions I had, anytime I had them. I highly recommend this Team.”

– Julienne E.

Warren Buffet is our New Boss!!!! Press Release!!!!

PRESS RELEASE !!!!!

Prudential, Real Living brands to be Berkshire Hathaway HomeServices

Brookfield Asset Management remains a partner in new brand

BY INMAN NEWS, TUESDAY, OCTOBER 30, 2012.

The nation’s second-biggest real estate broker, Berkshire Hathaway Inc. affiliate HomeServices of America Inc., has entered the franchising business by acquiring a majority interest in the Prudential Real Estate and Real Living brands from Brookfield Asset Management.

The Prudential Real Estate and Real Living affiliate networks will be rolled into a new franchise brand, Berkshire Hathaway HomeServices, that will come online in 2013, the companies said.

HomeServices and Brookfield have formed a joint venture, HSF Affiliates LLC, to operate the Real Living and Prudential Real Estate affiliate networks, whose member brokers employ 53,000 sales associates and closed more than $72 billion in home sales last year.

HomeServices is the majority owner of HSF Affiliates, with Brookfield Asset Management retaining joint ownership. Brookfield’s relocation business, Brookfield Global Relocation Services, will remain wholly owned by Brookfield. Terms of the deal were not disclosed.

“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., in a statement. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”

Ron Peltier, chairman and CEO of  HomeServices, said the company was “honored and proud to be entrusted with the use of the Berkshire Hathaway name as our new real estate franchise brand.”

Berkshire Hathaway HomeServices will be based in Irvine, Calif., and led by Earl Lee, who will serve as chief executive officer. Other key management executives named today are Chief Operating Officer Stephen Phillips, Chief Financial Officer Brian Peterson, and Chief Marketing Officer Aleya Chattopadhyay.

Lee has worked under the Prudential brand since his Hawaii-based company, Locations LLC, joined the Prudential network in 1995. He was president of Prudential Real Estate and Relocation Services when it was acquired by Brookfield Residential Property Services for $110 million last year.

Real Living founder and president Harley Rouda Jr. will take over as CEO of Trident Holdings Inc., the parent company of Ohio-based HER Realty Real Living. Rouda said HER Realty does not plan to be affiliated with Real Living or Prudential Real Estate.

Canadian-based Brookfield entered the U.S. market in 2008, by acquiring GMAC Real Estate and merging the company into Real Living the following year.

Phillips served as executive vice president and chief operating officer for GMAC Home Services from 2001 to 2006, and as interim CEO of the GMAC Relocation Services business. Peterson has 24 years of experience in the real estate brokerage and franchising business, including 14 years with Brookfield and GMAC. Chattopadhyay has been with Brookfield since 2003, holding roles in Canada, India and the U.K.

Peltier said that while Minneapolis-based HomeServices is getting into the franchising business to accelerate its growth and build a website that will be a destination for consumers, the company will continue to expand its company-owned brokerage operations.

“The business model we have used to grow for the last 15 years was to identify great companies, regardless of their brand, and own and operate those local companies,” Peltier said. 

Since HomeServices was acquired in 1998 by Berkshire Hathaway subsidiary MidAmerican Energy Holdings Corp., the “independent brand” acquisition strategy has helped the company grow from 4,000 agents in three markets to more than 16,000 agents in 21 states who last year handled sales of homes valued at nearly $32 billion.

Peltier said that while HomeServices will continue to identify brokerages to acquire, own and operate, “being a franchisor, we’ll be in a lot of markets much quicker than (with the) existing strategy” alone.

With consumers typically starting their home search on the Internet, creating a single destination website under the Berkshire Hathaway HomeServices brand will benefit both company-owned brokerages and franchisees, Peltier said.

“At some point, you can’t ignore the fact that if you want to attract customer eyeballs, you have to have a presence on the Internet, and you can’t do it with local independent brands” alone, Peltier said. “You have to have a single brand.”

Company-owned brokerages that operate under independent brands will continue to have the option of pursuing that strategy, while still benefiting from the exposure they will receive from the Berkshire Hathaway HomeServices website, he said.

“We will continue to grow and support the independent brand strategy as well,” Peltier said. “We’re adding to our strategy — this is not deleting.”

HomeServices of America’s business model now looks more like the one employed by competitor Realogy Holdings Corp. Although Realogy operates the nation’s largest brokerage company, NRT LLC, most of the company’s 2011 adjusted net earnings came from providing real estate franchise services to companies operating 13,800 offices under the Century 21, Coldwell Banker, ERA, Sotheby’s International Realty, Coldwell Banker Commercial, and Better Homes and Gardens Real Estate brands.

HomeServices owns nine brokerages affiliated with Prudential Real Estate, including three acquired this year: Portland, Ore.-based Prudential Northwest Properties, acquired in February; Seattle-based Prudential Northwest Realty Associates, acquired in April; Prudential Connecticut Realty, also acquired in April.

The six other HomeServices brokerages affiliated with Prudential Real Estate are and Prudential California Realty (Southern California), Prudential First Realty (Iowa), Prudential Rhode Island Realty, Prudential Carolinas Realty, Prudential York Simpson Underwood Realty (North Carolina) and Prudential Yost and Little Realty (North Carolina).

HomeServices also owns Koenig & Strey Real Living, a dominant brokerage in the metro Chicago area, which it acquired from Brookfield in 2009.

“This is not a new thought,” Peltier said of the decision to create a national franchise brand, noting that HomeServices was interested in acquiring the Prudential Real Estate brand two years ago. 

When Brookfield acquired the brand instead, it did so knowing it would eventually have to transition to another name — parent company Prudential Financial Inc. made that a condition of the sale.

“They were looking for a great brand, and we were fortunate in that we’d been given permission by our parent” company to use the Berkshire Hathaway name to create a new brand, Peltier said. It’s “an internationally recognized brand that’s currently not being used in commerce.”

According to an amended registration statement Prudential Real Estate Affiliates filed on Jan. 19 with the Minnesota Department of Commerce, Brookfield was barred from signing up new franchisees to operate under the Prudential Real Estate name. Brookfield had the right to renew the right of existing franchisees to operate under the Prudential name for up to five years, but only if their franchise agreements expired on or before Dec. 6, 2013.

All rights to use the Prudential Real Estate name expired at the end of 2027 — when the franchise agreement with the longest term was set to expire — or on the date on which no franchise agreement is in effect, the registration statement said.

Brian Boero, a partner in the real estate technology consulting firm 1000watt, said in a blog post today that while many existing Prudential affiliates “are deeply invested” in the brand, “I think most will jump at the opportunity to associate with Berkshire Hathaway. I’ve heard from some already, and they’re enthused. A conversion process that could have taken a decade will be collapsed into months.”

In filing its updated registration statement with Minnesota regulators, Prudential Real Estate also disclosed recent litigation with several franchisees.

Last year, Prudential Real Estate said it received $1.9 million from Mason McDuffie Real Estate Inc. to settle a breach of contract lawsuit Prudential Real Estate filed against the Pleasanton, Calif.-based brokerage after it switched its franchise affiliation to Better Homes and Gardens Real Estate.

Prudential Real Estate also disclosed that it had received settlement payments in 2011 from Prudential Texas Properties and Missouri-based brokerage Carter Duffey Inc.

I read this article at: http://www.inman.com/news/2012/10/30/prudential-real-living-brands-be-berkshire-hathaway-homeservices

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