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Thursday is set to be a temperature check on the real estate industry and the people and companies that make it run.
Ten of the biggest real estate companies are set to share insights about how well they recruited and retained agents, how successful those agents were at finding clients to buy and sell homes, and whether the companies managed to eke out a profit during the two-year slog of the U.S. housing market.
This year is on track to be the worst year for home sales since 1995. Transactions are almost 2 percent lower than they were last year. An onslaught of earnings results set to be released on Thursday will shed some light on the early impact of sweeping changes to the industry, which took effect in the middle of the quarter on Aug. 17.
“It still just relates to whether we started to see any notable impact from new industry norms around the settlements,” said Stephen Sheldon, a equity research analyst with William Blair who covers an array of real estate companies that will release their third-quarter results on Thursday.
So far, the impact appears to be relatively minimal, Sheldon said. But Super Thursday is set to make clear where some of the biggest players in real estate stand heading toward the end of the year.
The earnings releases and calls with investors and the media are also a chance for real estate executives to reposition their companies during times of change and mark their positions on policy debates that have roiled the industry in recent months.
“It all ties back to the outlook for housing volume. With the move back higher in the 30-year mortgage, how will that impact buyer demand?” Sheldon asked. “Will that weigh on volume as we progress into early 2025? Affordability just seems to be a key issue.”
The brokerages
Thursday will show how some of the biggest brokerages are able to attract agents and grow market share in a slower sales environment and amid broad pressure on the industry.
The Real Brokerage saw its revenue jump 82 percent in the second quarter when it still lost $1.2 million. Agent count, meanwhile, also spiked by 70 percent, to 19,540.
Tamir Poleg, Brad Inman; AJ Canaria Creative Services
Sheldon said he has his eye on changes in that agent count that occurred between July and October. He’s also watching for updates to the Real Wallet, a kind of bank account that allows Real agents to bank money and earn points from the brokerage that offset brokerage fees.
Sheldon is also watching agent counts at eXp Realty, which has seen its number of U.S. agents decline in recent months while international agent count has grown. In total, eXp boasted 87,111 agents at the end of June.
Thursday will also give the brokerage a chance to highlight other value it offers for agents. Last week, the company announced it was updating its revenue-sharing model in a bid to attract more agents.
“It seems like they’re tweaking and refining the agent proposition as well,” Sheldon said.
Fathom Realty, a flat-fee brokerage with more than 12,000 agents, planned to offset a decline in revenue by making its commission plans more favorable for agents who recruit other agents to the brokerage. The company earns about 90 percent of its money through its brokerage business, and its revenue slid 12 percent in the second quarter compared to a year ago.
For Douglas Elliman, Thursday will be a public airing of what its leaders view as the company’s path forward just days after ousting its chairman, CEO and president.
Scott Durkin was fired as president and CEO of the firm’s brokerage segment, just days after the abrupt retirement of Howard Lorber, who was chairman of the board, CEO and president of Douglas Elliman.
Richard Ferrari was appointed to take over for Durkin. Michael Liebowitz replaced Lorber.
The ousters came in light of sexual assault allegations against celebrity agents Oren and Tal Alexander, but the firm was also working to regain profitability after posting losses in the second quarter.
The franchisors
Super Thursday will provide updated insights into how the nation’s largest real estate franchisors are performing.
Anywhere Real Estate saw home sides fall by 5 percent in the second quarter, while prices rose enough to offset the decline.
The company is hoping to stop a three-year decline in revenue from its franchise business, which fell from $1.2 billion in 2021 to $983 million last year.
Ryan Schneider
Anywhere has also been working for years to manage its debt, and last quarter it reported having $2.7 billion in debt and about $128 million in cash on hand. Still, the company generated positive cash flow despite the slow market.
RE/MAX reported last week that its revenue slid 3.4 percent compared to last year, while its U.S. agents continued to head to the exits. It was the ninth-straight quarter of falling revenue for the franchisor.
The company reported that 6.5 percent of its agents in the country left, while it picked up more agents overseas.
The portals
Thursday will offer a view on some of the largest real estate portals on the planet.
Redfin is a brokerage and one of the top four biggest real estate portals. While a bulk of its revenue comes from its brokerage services, its status as a major portal helps it retain relevance among consumers, Sheldon said.
He’ll be watching for updates on the company’s cash flow and ability to turn a profit, noting that Redfin has debt coming due in the near future.
“The portal is really important for them strategically because the whole model, I think, relies on traffic to the portal,” Sheldon said. “Redfin is probably the company on our list that needs a big uptick in housing activity probably most across our coverage.”
Redfin reported losing $28 million last quarter. Its average monthly user total ticked down slightly, to 51.6 million.
News Corp., the major media conglomerate that owns Realtor.com parent company Move, Inc., will shed some light on the portal’s performance while it remains deadlocked in a heated battle with CoStar for prevalence among consumers and Realtors who pay the companies for leads.
Move reported Realtor.com’s traffic was flat during the second quarter, at 74 million average monthly unique visitors. The company has disputed CoStar’s reported metrics that claim its Homes.com is the No. 2 portal in the nation, behind only Zillow.
The iBuyers
The remaining large-scale iBuyers — Opendoor and Offerpad — have been waiting for their Goldilocks moment.
Super Thursday will offer an insight into whether Opendoor has had more success in finding a path to profitability while the major iBuyers set their strategies to weather the slower market.
It will show whether Opendoor remains committed to its stance of dealing in higher volumes than Offerpad, which has rapidly pulled back on the number of homes it buys.
Offerpad reported on Monday losing $13.5 million in the quarter even as it cut employee costs and slowed its home purchases by 49 percent. It bought 422 homes and sold 615 in the quarter, instead focusing on renovation services.
Opendoor, meanwhile, bought 4,771 homes last quarter, up 78 percent from a year earlier and 38 percent more than the first quarter of this year.
That higher volume can come with downsides, and Opendoor has already reported losing $201 million this year.
Short-term rentals
Brian Chesky | Airbnb CEO
Airbnb is the largest short-term rental company on earth.
In some ways, its primary competitor isn’t Vrbo or other well-known short-term rental platforms. Instead, it’s the hotel industry at large. But all of those groups are competing for a share of money spent by travelers across the globe.
In recent quarters, Airbnb has remained focused on expanding supply as fast as possible. It wants to make sure there are options in the markets travelers want to visit, which shifts over time. It also wants to offer options in countries that historically have been better served by hotels than short-term rentals.
The other goal of increasing supply is to make sure that prices grow more slowly than those of hotels, making short-term rentals a more attractive option.
Thursday’s earnings call will provide new insights into not only Airbnb’s performance heading into the fall but also how CEO Brian Chesky is positioning the company heading into 2025.
Expedia, meanwhile, typically doesn’t focus on Vrbo’s performance and instead will share insights into the metrics Airbnb is focused on, like hotel bookings and price changes.
Email Taylor Anderson
Editor’s note: Stephen Sheldon’s title has been updated.
