Berkshire Hathaway HomeServices' New Leadership Navigates Tariff Turbulence Amid Real Estate Shifts

The real estate landscape is in flux. Rising construction costs, shifting buyer sentiment, and regulatory headwinds have created a high-stakes environment for brokers and investors alike. Nowhere is this more evident than at Berkshire Hathaway HomeServices, where new CEO Chris Kelly has taken the helm amid a perfect storm of challenges—from tariffs on building materials to lingering litigation fallout. Yet Kelly, a seasoned executive with over two decades in real estate, is betting on his team’s resilience. “Our agents and clients are adaptable,” he recently stated, “and we’re positioned to lead through these changes.”

But can buyers and sellers really handle the strain? The answer hinges on how Berkshire Hathaway HomeServices navigates its next chapter.

The Leadership Transition: From Blefari to Kelly

Gino Blefari, who led HomeServices for over five years, has stepped back to become Chairman Emeritus, ceding control to Kelly, a veteran of the company’s legal and operational ranks. The shift comes as the brokerage navigates its largest settlement in history—a $250 million payout tied to the Sitzer/Burnett lawsuit—and counters unfounded rumors of a sale to rival Compass. Kelly’s priorities are clear: strengthen the franchise network, support agents through integrated services, and capitalize on HomeServices’ Berkshire-backed infrastructure.

Tariffs and the New Real Estate Reality

The 2025 tariffs on building materials are reshaping the market in ways that even Kelly’s leadership must address. Canadian lumber duties, steel and aluminum tariffs, and higher costs for imported gypsum and concrete have inflated construction expenses by 4–6%, according to the National Association of Home Builders. This translates to a $9,200 average increase per home, with mid-range homes now priced $10,000–$24,000 higher than just two years ago.

While Berkshire Hathaway’s parent company has weathered storms before, HomeServices’ brokerage business faces unique pressures. New construction is slowing—Chicago’s multifamily permits fell 13% in Q1 2025—and buyers are struggling with mortgage rates hovering near 7%, which have reduced borrowing power by roughly $75,000 for median-income households.

Kelly’s Playbook: Growth Through Adaptation

Kelly’s strategy focuses on three pillars:
1. Agent Empowerment: Leverage HomeServices’ integrated services (mortgage, title, insurance) to provide clients “one-stop” solutions amid rising costs.
2. Franchise Expansion: Grow the Berkshire Hathaway HomeServices network, which already spans 200+ franchises and 30,000 agents, by emphasizing affordability and stability.
3. Cost Mitigation: Work with suppliers to source materials domestically and lock in bulk pricing to offset tariff impacts.

Yet challenges remain. The NAHB warns that material costs have risen 34% since 2020, far outpacing inflation. Even temporary tariff pauses—like the 90-day exemption for Canadian lumber—have done little to alleviate long-term strain. “This isn’t just about tariffs,” says Kevin Thompson of 9i Capital Group. “It’s about whether the market can absorb higher prices without slowing demand.”

Market Context: A Tightrope Walk

HomeServices’ 2024 sales volume of $137 billion, up 2.1% from 2023, underscores its resilience. But the fourth-place ranking behind Compass, Anywhere Advisors, and eXp belies the uphill battle ahead. In markets like Chicago, suburban sellers face longer days on the market unless pricing adjusts, while urban buyers grapple with sticker shock.

Meanwhile, institutional investors are growing cautious. REITs and developers are delaying projects as material costs and labor shortages complicate timelines. “The real question,” says Carl Harris of the NAHB, “is whether HomeServices can maintain its growth trajectory while absorbing these costs.”

Conclusion: A Test of Resilience

Chris Kelly’s ascension marks a critical inflection point for Berkshire Hathaway HomeServices. With tariffs driving a $17,000–$22,000 increase in new home prices and mortgage rates stifling affordability, the company’s ability to support agents and clients will determine its success.

The data is clear: HomeServices’ 2024 performance and its Berkshire-backed resources provide a foundation for stability. But to sustain growth, Kelly must balance operational agility with strategic patience. If he can mitigate cost pressures while expanding the franchise network, HomeServices may yet thrive—even in turbulent waters. As Blefari noted, this is “the next chapter” for the brokerage. The question is whether it will be a continuation—or a turning point.

With tariffs and interest rates unlikely to retreat soon, the answer may come down to one thing: execution.