The hot housing market has crowned another winner: Redfin.
The discount brokerage reported revenue of $866.1 million in 2020, up 14 percent year-over-year. While it reported a net loss of $18.3 million, that was an improvement from its loss of $80.3 million in 2019.
Like other firms, Redfin got a boost after U.S. home sales surged during the second half of 2020.
The brokerage reported $14 million in profits during the fourth quarter, compared to a $7.8 million loss during the same period in 2019. Its quarterly revenue rose 5 percent year-over-year to $244.5 million.
The firm said January sales were up 24 percent year-over-year.
But inventory has hit “rock bottom,” CEO Glenn Kelman said during an earnings call Wednesday.
“The housing market is now like a Soviet-era supermarket with most of the shelves empty,” he said, noting that inventory plunged 26 percent year-over-year in January.
During an earnings call Wednesday, Kelman said Redfin faced another unusual challenge last year as the housing market rebounded: too few agents.
The firm, which employs salaried agents (which it calls lead agents), said during the fourth quarter, customer demand rose 54 percent year-over-year. But even though recruiting was up 79 percent in December and January, Redfin won’t have enough agents to meet that demand until June 2021. “We’re hiring lead agents faster than ever,” Kelman said.
Ahead of its earnings report, Redfin announced a deal to buy RentPath for $608 million. The acquisition will allow it to compete for customers seeking rentals and sales.
Redfin has positioned itself as one of the more progressive brokerages. It recently said it would publish commission information on its listings, for example. It’s also one of the first firms to list flood data online. But it has also been criticized for its efforts around diversity.
During the call, Kelman also acknowledged those efforts, including a company-wide mandate to hire more people of color. He said Redfin turned some customers away because it lacked enough staff.
“But what I’ve concluded from this experience is that you have to pay the most attention to diversity when it feels that you can least afford to do so,” he said. “When your company is in crisis and has to reduce costs, or when you’re hiring hand over fist … Those are the moments when people make decisions on instinct surfacing primordial biases.”