Fewer transaction sides and lower average sales prices compared to a year ago resulted in a 31% annual decline in revenue for Anywhere Real Estate during the first quarter of the year.
The real estate conglomerate reported revenue of $1.13 billion for Q1 2023 and a net loss of $138 million, compared to a net income of $23 million a year ago.
Despite these financial struggles, firm executives were positive about Anywhere’s results for the quarter.
“Given the market dynamics, we had solid financial and operational performance in the first quarter, and continue to focus on what we can control: our cost savings and executing against our strategic plan,” Charlotte Simonelli, Anywhere’s CFO, told investors and analysts during the firm’s first-quarter earnings call Wednesday evening.
Executives attributed a large portion of the weaker financial results to the slower housing market. During the first quarter of 2023, Anywhere Brands, the firm’s franchise group saw its number of closed transactions drop 31% year over year to 150,491, with the average sales price recording a 3% annual decline to $437,964.
Anywhere Advisors, the firm’s owned brokerage group, recorded a 25% annual drop in the number of closed transaction sides to 53,797 and a 6% year-over-year decrease in the average sales price to $663,223 during the quarter.
Even with the lower volume, executives were pleased to tell investors and analysts that Anywhere realized a cost savings of roughly $50 million during the quarter. This puts the company on track to deliver the goal of $200 million of cost savings for the full year.
“We have a relentless focus on changing how we operate our company to drive greater efficiency,” Simonelli said. “The majority of the savings will come from headcount and real estate footprint efficiencies, representing about 70% of our 2023 savings.”
According to Simonelli, Anywhere has reduced its headcount by 11% since June of 2022, and the firm is focused on making its brokerage offices more efficient and integrated with transaction services, including title and mortgage.
“We have historically operated title and brokerage separately, but now we are focused on the opportunity to integrate administrative operations,” Simonelli said. “This will change how we deliver services to brokerages, expanding our value proposition. This simplifies the transaction for agents and consumers, shortening timelines and improving the end user experience. This will also drive efficiencies and streamline operations by leveraging work that had previously been down in both title and brokerage and now eliminated those redundancies.”
Executives noted that roughly two-thirds of the year’s cost savings would be permanent and are not expected to return when transaction volumes increase.
With these cost saving measures, as well as increasing automation and improving the attach rate for title and other services, Anywhere executives feel that they are putting the firm in position for greater success in the future.
“We continue to believe the housing market will improve through the course of the year, and I remain quite optimistic about the housing market over the medium term — and our ability to lead in it,” Ryan Schneider, the firm’s CEO and president, said. “To achieve even greater success in the future, we continue to seize this moment to position Anywhere to capture the benefits of the better housing environment, as together with our agents and franchisees, we move real estate to what’s next.”
