Can Warren Buffett’s entry into real estate do for consumers what Geico – a wholly owned subsidiary of Berkshire Hathaway – did for insurance? So far, there’s no evidence Berkshire Hathaway Homes Services (BHHS) is launching a witty marketing campaign or offering a value proposition akin to “Fifteen minutes could save you 15% or more on car insurance.”
For two decades, Real Estate Cafe has championed money-savings, consumer-centric innovation in real estate, so we’re skeptical that Berkshire Hathaway’s entry into real estate will be transformative for Millennials (or any market segment), particularly if it means repositioning thousands of existing franchisees.
On the surface, Berkshire Hathaway’s REthink Council is to be congratulated for taking a cue from the NAR’s reThinkFuture campaign. However, putting Millennial lipstick on an industry “stuck in the “dinosaur age” won’t be enough to attract 20 to 30 years buyers and sellers when new technology and disruptive ideas — including abandoning the industry’s bloated, two-sided commission — are more compelling for a generation of do-it-yourself / DIY homebuyers and sellers.
Targeting Millennials or “White Glove” Luxury Market?
One should not judge a book by it’s cover, but the oversized, white-on-white Berkshire Hathaway booth at the National Association of Realtors convention in San Francisco in November 2013, was about as inviting as a living room with plastic dust covers on the furniture. Aside from the Berkshire Hathaway staff, the booth appeared to be getting little traffic; but if you target the right market niche, maybe that’s all you need to prosper. As this link documents, BHHS is targeting the 1% — “the luxury market to the world’s most high-end consumers…. seeking a life without compromise.”
So it’s not surprising that the only Berkshire Hathaway for sale sign I have seen so far was in gentlemen farm country in Connecticut; hardly a location where Millennials — a.k.a. “Generation Broke” — are hanging out unless they’re sharing expenses in a rural co-housing community.
Listen to this motivational speech by BHHS’s reThink Council leader and see if there is any insight into excessive rent burdens or other challenges faced by a generation that counts 22 million peers living at home with their parents?
Radical reThink = Consumer Savings
So Millennials, ask yourself, “who can best understand and serve your housing needs?” — a billionaire-backed brand intent on capturing the luxury home market or one of the new business models that is really trying to reThink real estate RADICALLY and deliver billions of dollars annually in consumer savings?
Got your own ideas about how to disintermediate real estate agents, like the DIY mass mailing campaigns described last week in Boston.com’s real estate blog?
Want to participate in a visioning exercise to create an new eco-system, like the brainstorming board shown in the photo above? We need Millennials and other motivated innovators to create momentum for our “reVRM-Minifesto” in 2014 by asking:
$30B annually in Consumer Savings vs $60B net worth?
Forbes recently estimated Warren Buffet’s net worth at just under $60 Bilion dollars. Would you believe that tech-savvy, DIY real estate consumers could save that much money in just two years according to a prediction made by McKinsey & Company in 1998?
Want to experiment with some new money-saving real estate apps or co-create them? Email email@example.com to learn more about our collaborative visioning exercise.