Redfin beats Q3 estimates however inventory dips; CEO says firm’s tech is a ‘passport to a new life’

Redfin CEO Glenn Kelman at a Expertise Alliance luncheon in Seattle. (GeekWire Picture / Kevin Lisota)

Redfin beat analyst expectations for its fiscal third quarter, reporting income of $236.9 million and a non-GAAP earnings per share of $zero.32. Income was down 1% year-over-year whereas web earnings greater than quadrupled. Wall Road anticipated income of $227 million and earnings per share of $zero.25.

Nonetheless, the corporate’s inventory was down as a lot as 6% in after-hours buying and selling.

“Redfin’s increasing share of North America’s online real estate audience, coupled with a strong housing market, has generated demand faster than we can recruit agents, lenders and partners,” Redfin CEO Glenn Kelman stated in an announcement.

Kelman pointed to the corporate’s digital instruments that allow digital excursions, video appointments with brokers, and extra. They’re serving to Redfin modify for social distancing mandates amid the pandemic. Redfin carried out greater than 20,000 video excursions final quarter, and about 9% of tour requests had been for video excursions.

Redfin’s month-to-month lively guests grew to 49.3 million, up from 35.6 million within the year-ago quarter, a rise of 38%.

“It has taken us more than a decade to build the technology and the vast network of local agents to let people tour almost any home for sale in almost any town in America, virtually or in person,” Kelman stated. “This capability was a convenience for people still likely to use a traditional agent for a cross-town move. But for the millions of Americans now free to move anywhere in the country, that little Redfin touring button on their cell-phone screen has become the passport to a new life.”

Redfin and different actual property tech firms akin to fellow Seattle-area giant Zillow Group are driving a pattern of elevated house possession pushed partly by record-low mortgage charges. The housing market has additionally bounced again after stalling when COVID-19 hit the U.S. in March. The shift to distant work can be giving folks extra flexibility for the place they dwell.

Present house gross sales had been up 9.4% in September in comparison with August, and up greater than 20% year-over-year, in response to the National Association of Realtors. Dwelling costs had been up 15% year-over-year final month, whereas lively listings fell 29% final month to an all-time low, in response to Redfin. U.S householders have gained $2 trillion in house worth this 12 months.

After a giant dip in March, Redfin’s inventory worth has greater than quadrupled, buying and selling at round $47/share Thursday. Shares dropped 16% in October after Redfin announced a brand new providing of $575 million in convertible senior notes. The corporate’s market capitalization is sort of $5 billion.

Redfin in June resumed its RedfinNow home-buying business after pausing it as a result of pandemic. It expanded RedfinNow to Sacramento final month, its 11th market nationwide.

Redfin’s Properties phase, which incorporates RedfinNow, posted income of $19 million within the third quarter, down from $80 million final 12 months, whereas gross losses grew to $1.5 million from $745,000.

Redfin laid off 7% of its staff and furloughed a whole bunch of brokers in April. The corporate in July stated it employed many of the furloughed workers again and resumed hiring in a number of markets. It employed greater than 400 new workers final quarter.

Redfin is dealing with allegations of discriminatory pricing practices and “redlining” in a lawsuit filed by the Nationwide Honest Housing Alliance (NFHA) and different truthful housing organizations. The NFHA, which filed a lawsuit last week, stated that after a two-year investigation it decided that Redfin’s minimal house worth coverage discriminates in opposition to sellers and patrons of houses in communities of colour in lots of metropolitan areas.

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