redfin tuna Chief Executive Glenn Kelman said Tuesday on the company’s second-quarter 2024 earnings call that he expects business to improve when the housing market accelerates as mortgage rates fall.
But if interest rates don’t come down, what are the options?
“Great question – Plan B is to drink our own urine or a competitor’s blood,” Kelman said in response to analysts’ questions during a conference call.
Kelman’s brazen comments aside, Redfin is in the same boat as many brokerages struggling with reduced trading volumes and frozen markets. There are legitimate concerns as the market has yet to react to the recent decline in interest rates.
“This is the Twilight Zone, man,” Kelman said. “I don’t remember interest rates going down so fast, so fast, and the market reacting so quietly. I think part of it might be that it’s so late in the home buying season. If that had happened in April, May, June, When people are getting ready to go, maybe [homebuyers] There will be different reactions.
Redfin’s second quarter 2024 numbers were mixed. Revenue increased by 7% year-on-year to US$295.2 million, and gross profit increased by 9% year-on-year to US$109.6 million. But the company posted a net loss of $27.9 million, slightly higher than the $27.4 million a year ago.
Kelman talks about the impact of reconciliation national association of realtors (NAR) Agreed on the issue regarding buyer agent commissions. Although Compass CEO Robert Reffkin said there was no change in commission rates during the company’s earnings call last week, Kelman said Redfin agent commissions have dropped to $8 in markets adopting new business practice changes ahead of the Aug. 17 deadline. The lowest level on the 17th of March.
Redfin said it has seen an increase in new agent recruitment in markets that have implemented the Redfin Next payment plan, which gives agents a more traditional 70% commission split on top of the salary and benefits offered by the company.
Redfin Next launched in San Francisco and Los Angeles in October 2023, with more than 200 top agents reportedly joining the brokerage since then. The program will expand to 25 new markets starting August 11, covering markets that account for 74% of the brokerage’s revenue.
The new markets are Austin; Boise, Idaho; Coastal North Carolina; Columbus, Ohio; Denver; Fort Myers, Florida; Grand Rapids, Michigan; Indianapolis; Inland Empire, California; Missouri Kansas City; Memphis, TN; Minneapolis; Nashville; New Mexico; Palm Springs, CA; Portland, OR; Raleigh; Sacramento; Salt Lake City; San Antonio; Seattle; Spokane, WA; St. Louis; and Victoria Genia.
Adding agents now will prepare them for the upcoming fall homebuying season, Kelman said, assuming Redfin doesn’t have to resort to Plan B.
“First we drink urine, then we drink blood,” he said. “Actually, I wish I hadn’t said that. I’m a lover, not a warrior.
