Warren Buffett Just Bought an $8.5B Property

At over eight billion dollars, the acquisition of this property is expensive, but it’s loaded with more features than you’d think. Berkshire Hathaway just announced it is acquiring homebuilder Taylor Morrison for approximately $8.5 billion.

List price: $8.5 billion.

Location: 350+ communities across 21 markets in 12 states.

Days on market: Zero (Private Listing)

Condition: Well maintained. Strong cash flow. Significant upside potential.

Not a bad purchase on the surface. Upon closer inspection, I was impressed to realize Berkshire wasn’t buying just a homebuilder. They were buying something much, much larger.

Taylor Morrison doesn’t just build homes. It originates mortgages, provides title and escrow services and sells homeowners insurance. Yowza. Additionally, on the front end, it develops rental communities, allowing it to maintain relationships with customers for decades.

In real estate terms, this isn’t a house or a builder. It’s a house with a lender, title company, insurance agency, rental division, and customer database included.

That’s a lot of features and value packed into one property.

What really caught my attention in this Inman article wasn’t just the price tag. It was a comment from Greg Abel, Warren Buffett’s expected successor. He said Berkshire plans to eventually combine Taylor Morrison with Clayton Homes and other Berkshire housing-related businesses into a unified platform.

That’s an interesting choice of words: “Platform.”

This fits a pattern we’ve seen lately. It would be a good time to be in the merger and acquisition world. In the past 12 months, here are just a few:

Real acquired RE/MAX.

eXp acquired NextHome.

Rocket acquired Redfin.

Buffini partnered with Inside Real Estate.

RESO and CMLS spent months exploring a merger (which ultimately didn’t happen).

Compass continues battling with Zillow and Anywhere over inventory, listings, and distribution.

Now Berkshire is adding Taylor Morrison to a housing portfolio that already includes Clayton Homes and HomeServices of America.

Different leadership teams and different business models – similar goals. They’re all responding to the same reality. The housing industry is reorganizing itself.

Most people will point to AI as the driving force. Every conversation seems to come back to AI these days. I’m not so sure. I think it may be the opposite of AI: People’s relationships.

When I look at these deals, I see companies trying to move closer to the customer.

For decades, different parts of the housing transaction were handled by different businesses. The builder built. The lender lent. The title company closed. The brokerage found the buyer. The insurance company wrote the policy.

Increasingly, the industry’s largest players seem to be asking a different question:

How much more of that relationship can we participate in?

That’s what makes Berkshire’s acquisition of Taylor Morrison so interesting.

They’re not simply buying a homebuilder. They’re buying a company that participates in multiple stages of the housing journey. The rental relationship. The mortgage relationship. The title relationship. The insurance relationship. And ultimately, the homeownership relationship itself.

That’s why Berkshire’s acquisition of Taylor Morrison is more interesting than a simple homebuilder acquisition. They’re not just buying houses. They’re buying a larger position in the housing ecosystem.

The more merger announcements I read, the more convinced I become that we’re watching a new power map emerge across housing.

Housing Industry Consolidation

In fact, I think we’re watching what could best be described as Housing Industry Consolidation. Not simply bigger companies getting bigger, but companies positioning themselves to participate in more parts of the housing journey.

To me, Housing Industry Consolidation is the trend of companies participating in more stages of the housing journey, from customer acquisition and financing to brokerage, insurance, and long-term customer relationships.

Mike DelPrete recently highlighted the changing balance of power between Zillow, Compass, and other housing companies. I suspect Housing Industry Consolidation may be another symptom of the same shift.

And yet, the companies that emerge strongest over the next decade may not be the ones with the best individual products. They may be the ones that participate in more of what has always mattered most in real estate: relationships.

That’s what I see when I look at Berkshire’s acquisition of Taylor Morrison. Not a homebuilder acquisition, but another step toward participating in a larger portion of the housing journey.

Maybe that’s what Housing Industry Consolidation really is. Not bigger companies for the sake of being bigger, but companies trying to participate in more of the relationship, from the first interaction all the way through the transaction and beyond.

If that’s true, then Berkshire isn’t just buying a homebuilder. They’re buying another piece of the housing ecosystem.