Realogy’s profits plunged during the second quarter, after coronavirus slowed home sales across the country, the brokerage giant said Thursday.
Realogy reported a $14 million loss during the quarter — a huge drop from $69 million in profits during the same period last year. Citing a “massive drop-off” in transactions, Realogy said revenue also fell 25 percent to $1.2 billion, from $1.6 billion a year ago.
During an earnings call with analysts, CEO Ryan Schneider cited an “unprecedented” drop in home sales in March, April and May. But Schneider said open transaction volume — which represents new deals — is showing “very strong” growth. Preliminary data for July show open volume rose about 30 percent.
To stem its losses during the height of the pandemic, Realogy took drastic cost-cutting steps, including slashing executive pay and marketing expenditures.
CFO Charlotte Simonelli told analysts that Realogy reduced expenses by $95 million during the pandemic. Most of the temporary cuts, she said, would be pulled back by the end of the year. But going forward, she said Realogy expects to reduce its lease expenses by $10 million to $15 million.
As the housing market picks up, Realogy said it’s seeing demand in the suburbs. In New York City, where sales declined 50 percent at one point during the pandemic, sales are still down about 30 percent to 40 percent, Schneider said.
By contrast, New Jersey is “on fire,” Schneider said, with sales up 50 percent.
Realogy, the parent of the Corcoran Group and Coldwell Banker, said it finished the quarter with $686 million of cash, including $400 million of credit it drew down in March. Realogy still has north of $3.5 billion in corporate debt, however.
During the quarter, Realogy said its agent headcount was up 2 percent, the fifth consecutive quarter of year-over-year growth.
Schneider said that during the pandemic, agents have become even more valuable to their clients. “All of the iBuyers shut down, and the agents powered on,” he said. “Realogy agents and others.”