Warren Buffett is known for his many prudent investments and his faith in the real estate market. He recently extended his bet on the housing market. His firm, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) has teamed up with Brookfield Asset Management Inc. (NYSE:BAM) (TSE:BAM.A) to form a mega residential real estate network. Berkshire’s arm, HomeServices of America Inc., has bought major stakes in Prudential Real Estate and Real Living Real Estate. Both of these brands are owned by the Toronto-based, private equity firm, Brookfield Asset Management. The announcement was made on the company’s website on Tuesday. The specifics of the agreement were not disclosed.

Warren Bufftett

This joint venture will spring a new brokerage company, which will operate under the name of Berkshire Hathaway HomeServices. This would further expand the network of HomeServices of America, which is already among the largest real estate brokerage firms in the US, as it operates in 21 states and is based on 26 realty firms. The new franchise, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) HomeServices, is expected to start operation by the end of 2013.

Buffet said that the new franchise will be “built upon the financial strength and leadership of Brookfield Asset Management Inc. (NYSE:BAM) (TSE:BAM.A) and HomeServices”. He added, “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) be part of the new brand.”

Buffett also owns a major stake in the largest mortgage lender of the US, Wells Fargo & Company (NYSE:WFC). Buffett intends to profit off the low interest rates, which are bemoaned by other leading value investors. He has also appreciated the policies of Ben Bernanke, Chairman Federal Reserve. It is worth mentioning here that other leading investors have slammed the Fed’s approach, which is aggressively focused on the housing market and ignores other major financial issues.

“We have significant inventory shortage across the country”, HomeServices CEO, Ron Peltier, said in a phone interview with Bloomberg news. “When you add the pieces up, together, with low interest rates, we see a housing market that will continue to improve.”

Brookfield Asset Management Inc.(NYSE:BAM) (TSE:BAM.A) last surfaced in the news after Bill Ackman of Pershing Square criticized the asset managers for their under the table plans to acquire General Growth Properties Inc (NYSE:GGP). Brookfield denied that it had any such schemes. Pershing Square owns more than 8 percent of General Growth Properties Inc (NYSE:GGP), while Brookfield holds a 40 percent stake in General Growth Properties.