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Anywhere Reports Losses Amid Slow Housing Market

Anywhere Real Estate felt the brunt of slow home sales during the fourth quarter of 2023 as the company reported a loss of $107 million during the three-month period.

It generated $1.3 billion in revenue in the fourth quarter, a decrease of 6% year over year. A nearly 20% annualized decline in home sales was the major driver of the decline in revenue. 

Overall, the company ended the year with $5.6 billion in revenue and $97 million in losses.

“Anywhere demonstrated our leadership strength in 2023, driving meaningful results in a tough real estate market,” Ryan Schneider, Anywhere president and CEO, said in a statement. “In a potentially improving housing market, we are excited to build on our competitive advantages, accelerate our strategic agenda, and deliver even greater value to Anywhere affiliated agents, franchisees, and shareholders in the year ahead.”

The company produced these results amid “an incredibly difficult year for the housing market,” Schneider said during an earnings call on Thursday.

Home sales transaction volume dropped 19% year over year. According to the National Association of Realtors, 4.09 million existing homes were sold in 2023, the fewest since 1995. Additionally, unprecedented litigation efforts against agent commissions have crippled the industry since last fall.

The company’s revenue suffered, but Anywhere still managed to improve its capital structure with more than $300 million of debt reduction.

“Continuing debt reduction is critical and remains a top capital allocation priority,” Schneider said during the call. 

Schneider also highlighted the performance of the Sotheby’s International Realty brand, which stood out by posting a higher year-over-year volume in Q4 2023. Both the national housing market and Anywhere’s overall portfolio posted lower volumes on an annualized basis. 

During the fourth quarter, transaction sides at the firm’s franchise group, Anywhere Brands, dropped 11% year over year to 165,815. The firm’s owned brokerage group, Anywhere Advisors, recorded a 10% annual decline in transaction sides to 57,546.

Anywhere Brands and Anywhere Advisors each reported a 5% increase in their average home sale price, inching up to $460,438 and $692,791, respectively.

On the bright side, the agent commission split grew moderately year over year, reaching 80.2% in the fourth quarter, according to Charlotte Simonelli, the company’s executive vice president, chief financial officer and treasurer. 

“The improvement in split pressure this year was driven by lower volumes, more stable agent mix, better recruiting economics and other proactive actions the company has taken,” Simonelli said during the earnings call.

Schneider expressed his optimism about 2024 as mortgage rates have started to tick down, consumer sentiment around housing is improving and benchmark rate cuts are expected. 

But Matthew Bouley, a  senior equity research analyst at Barclays, wrote that “the environment for the existing home market continues to be challenging, especially as rate cuts look to be further out, compounded by the overhang of brokerage commission rate lawsuits.”

The ongoing lawsuits against agent commissions were another hot topic during the call. Anywhere announced a settlement of both the Sitzer/Burnett and Moehrl antitrust class-action suits in October.

“We have successfully settled the first nationwide settlement in the seller antitrust class action litigation,” Scheider said. “We are passionate about spending our leadership’s time and dollars growing our business and supporting our customers rather than on litigation.”

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