As companies report their Q4 and full-year earnings, industry-watchers read the tea leaves for indications of what’s working now — and what’s likely to happen next.

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After high-flying pandemic-era growth and profitability, the past few months have seen uncertainty seep into the real estate market, driven in large part by interest rate increases and ongoing affordability issues. Thus, looking at the year-over-year numbers becomes an exercise in balancing the impact of outsized 2021 numbers against the effects of the recent slowdown.

In case you missed it, here’s what seven major real estate companies reported in their Q4 2022 earnings. Based on these numbers, industry-watchers are reading the tea leaves, looking to extrapolate from the reporting what’s working now — and what’s likely to happen next — in the real estate market.

Anywhere profitability dips in Q4 as executives brace for disruptive 2023

Anywhere Real Estate logged declining revenues for the third-consecutive quarter on Thursday, with the real estate holding company raking in $1.3 billion during the fourth quarter — 33 percent below the same period the previous year. 

Although the company was able to hold on to its profitability in the third quarter of 2022, it could not say the same for Q4 with net losses ballooning 1,064 percent year over year to $453 million. Adjusted net losses, which exclude non-cash goodwill and non-cash accounting charges, clocked in at $93 million.

Takeaway: Although Anywhere was still holding onto profitability in Q3 2022, huge fourth-quarter losses helped push the company to a year-over-year revenue decline of 13 percent down to $6.9 billion, a net loss of $287 million.

Compass revenue falls in Q4 — but losses narrow despite ‘difficult year’

In its earnings report, Compass announced that between October and December of last year it brought in $1.11 billion in revenue. That’s down from $1.6 billion during the same period in 2021. The dip was due to a 25 percent decline in transactions, which in turn “was attributable to lower industry-wide transactions,” the company said in the report.

Compass also suffered a net loss of $158 million during the fourth quarter. That’s an improvement compared to the $175 million the company lost during the final three months of 2021.

Takeaway: Compass was not immune to industrywide declines in transactions, falling 25 percent year-over-year during Q4 2022. However, net losses of $158 million during the quarter were actually an improvement over Q4 2021 losses of $175 million.

EXp cites ‘volatile housing market’ for double-digit sales decline in Q4

The total weight of a topsy-turvy real estate market fell on eXp World Holdings during the fourth quarter, with its revenue declining 13 percent year over year to $933 million. While the cloud-based company held onto its profitability in the third quarter with a net income of $4.4 million, it failed to do the same for the fourth quarter, with net losses reaching $7.2 million during the three months ending on Dec. 21, 2022.

The losses were attributed to a volatile housing market that saw closed transactions decline 13 percent year over year to 109,168. Sales volume also declined 16 percent year over year to $37.6 billion.

Takeaway: Although cloud-based eXp had seemed immune to some of the industrywide declines in Q3 2022, Q4 resulted in a net loss of $7.2 million and a 13 percent year-over-year decline in closed transactions.

A volatile housing market slices at RE/MAX’s Q4 revenues, profits

RE/MAX Holdings released its fourth quarter and full-year 2022 results on Thursday, Feb. 16, which reflected the continuing impact of an increasingly difficult real estate market amid rising interest rates and slowing home sales. 

Total revenue — which includes RE/MAX and Motto Mortgage — decreased 8.9 percent year over year to $81.3 million during the fourth quarter due to diminished broker fee revenue, a 1.9 percent drop in its North American agent count and costs related to increased recruiting incentives.

Takeaway: Combined revenue from RE/MAX and Motto Mortgage showed an 8.9 percent year-over-year decrease, due in part to diminished broker fee revenue, increased recruiting costs, and a 1.9 percent drop in North American agent count.

Opendoor’s losses doubled in Q4 as the iBuyer’s revenue fell 25%

In total, Opendoor brought in $2.9 billion in revenue during the fourth quarter of last year, according to a newly published earnings report. That’s down 25 percent compared to the final quarter of 2021. 

The company also revealed that it sold 7,512 homes during the quarter, a year-over-year dip of 23 percent. Additionally, Opendoor suffered a net loss of $399 million between October and December of last year — more than double the $191 million loss from one year prior.

Takeaway: The last major iBuyer standing saw a 25 percent year-over-year revenue decline totaling $399 million, more than double the Q4 2021 loss of $191 million.

Redfin sees revenue fall, losses mount amid tough market in Q4

In its first earnings report since bowing out of iBuying, Redfin revealed that amid a toughening real estate market its revenue fell, and its losses grew in the final three months of 2022. The numbers show that the company brought in a total of $479.7 million in revenue during the fourth quarter of last year. That’s a 25 percent drop compared to the fourth quarter of 2021. 

At the same time, the company lost a total of $61.9 million, up from $27 million during the same period one year prior.

Takeaway: After its failed foray into iBuying, Redfin’s losses grew year over year in the fourth quarter of 2022. Its $479.7 million in revenue represented a 25 percent year-over-year drop.

Zillow sees revenue dip in Q4, but manages to trim losses

Portal giant and erstwhile iBuyer Zillow revealed that its profit fell year-over-year in the final months of 2023, though it also managed to reduce losses. In total, Zillow brought in $435 million in revenue during the fourth quarter of last year. That’s down 19 percent compared to the fourth quarter of 2021 when Zillow earned $535 million in revenue. 

The fourth quarter of 2022 also saw Zillow suffer a net loss of $72 million. Although an objectively large number, that loss is actually way down from the $261 million Zillow lost in the fourth quarter of 2021.

Takeaway: Similarly, Zillow’s exit from iBuying allowed it to reduce losses in Q4. However, the company was still down 19 percent from its Q4 2021 take of $535 million.

Christy Murdock is a Realtor, freelance writer, coach and consultant and the owner of Writing Real Estate. She is also the creator of the online course Crafting the Property Description: The Step-by-Step Formula for Reluctant Real Estate Writers. Follow Writing Real Estate on TwitterInstagram and YouTube.

Opendoor | Zillow
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