Since Chattanooga's Realty Center adopted Warren Buffett's Berkshire Hathaway HomeServices brand in January, general manager Byron Kelly says his agency has been able to open more doors to would-be home sellers.
"We had one guy who didn't even trust the real estate listing process with his property call us this spring and tell us, "if you're trucking with Warren Buffett, we'll truck with you,'" Kelly said. "It's made a real difference."
The head of Buffett's real estate brokerage network, Berkshire Hathaway HomeServices CEO Gino Blefari, came to Chattanooga Wednesday to encourage the 155 agents selling under Kelly's Berkshire Hathaway franchise in Chattanooga to both increase their sales volume and the value of what they sell.
Gino Blefari"We continue to grow, but we don't necessarily want to be the biggest real estate agency," Blefari said. "We want to be one of the top three agencies in all of the markets we operate and we want to be a high-end brand. I want to help the current franchise here double in the size, rather than just get a bunch of other affiliates."
In Chattanooga, the Berkshire Hathaway brand replaced Prudential in January at Chattanooga's Realty Center, which Ben and Karen Kelly founded in Chattanooga more than three decades ago. Since 2002, Realty Center has averaged the highest median home sales price among the city's top 10 agencies, Kelly said.
The agency has added about 20 agents this year at its five offices, Kelly said.
But Chattanooga's real estate and home building market is improving this year for all types of agencies and builders. In the first half of 2015, the Greater Chattanooga Association of Realtors reported 4,247 sales were completed of single-family homes, up 14.4 percent from a year ago. The median price of homes sold in Chattanooga so far this year is also up by 7 percent to $149,500.
Home builders in the Chattanooga region started 17.4 percent more homes this year than in the first half of 2014, according to the Knoxville-based Market Edge report which tracks building permits in five area counties. From January through June, builders started 875 new homes in Hamilton, Bradley, Catoosa, Walker and Whitfield counties.
"The labor market is driving the economy right now," said Dale Akins, president of the Market Edge LLC. "As more jobs are added and people are working, we're seeing more building permits to construct more houses. Historically, the year leading up to any presidential election tends to be good for home building so I expect we'll see this trend continue."
Blefari said the market is strong in most areas of the country and is likely to continue to improve even if interest rates edge higher this fall.
"There is a lot of pent up demand because home sales have not kept pace with the overall growth in population," Blefari said. "The market should be good for at least the next couple of years."
The Federal Reserve Bank has signaled that it could begin boosting interest rates as soon as next month, but such changes are not likely to cause any immediate jump in mortgage rates that Blefari said "remain near historic lows."
At today's 4 percent range, a 30-year mortgage is paid off 13 percent quicker than when the mortgage is at the 16 percent level reached a generation ago.
Although many Millennials (born from the 1980s to the early 2000s) have delayed buying homes due to student debt or delayed marriages and careers, a growing share are now becoming home owners, Belfari said.
"We've studied Millennials and what we have found is that while they are coming into the market at an older age, they still want to own their own home someday," he said. "Nothing has really changed in that desire."
One change has been that many younger buyers are more brand conscious today, which Blefari said works to the advantage of well respected brands like Berkshire Hathaway.
Berkshire Hathaway HomeServices is franchised in 47 states and has nearly 39,000 agents, Blefari said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.