Anywhere loses $450M as execs foresee “volatile” 2023

Anywhere Real Estate finished the fourth quarter with a net loss of $453 million as executives theorized the slowed housing market may be near its bottom.

The parent company of Corcoran, Coldwell Banker, Century 21 and Sotheby’s International Realty finished last year with a net loss of $287 million. The company posted an adjusted net income of $32 million in 2022 and its operating EBITDA — earnings before interest, tax, depreciation and amortization — was $449 million for the year.

It finished the quarter with a net loss of $453 million and a net adjusted loss — before expenses like restructuring charges, debt payments and investments — of $93 million. Quarterly EBITDA was $12 million.

The company brought in $6.9 billion in revenue last year, a 13 percent annual decline it said was driven by fewer home sales and the sale of its title insurance underwriter. Revenue last quarter was $1.3 billion, down 33 percent year over year in line with transaction volume decline, according to Chief Financial Officer Charlotte Simonelli. 

Chief Executive Officer Ryan Schneider said the company expects market volume in the first quarter “to be down around 30 percent” from last year and while those year-over-year quarterly comparisons could “improve throughout the year,” this year’s market will be “meaningfully lower” than 2022.

“Most importantly and potentially excitingly, right now we may be at or near a bottom already,” Schneider said. “We’re all seeing a number of the housing indicators in the macro economy exhibit more stability.” 

Despite the market downturn, Anywhere realized $150 million in cost savings and projected another $200 million in savings this year, with $50 million resulting from measures taken last year. 

The projected $350 million in savings by the end of the year put it far ahead of the timeline executives laid out in late 2021, when they projected savings of $70 million by the end of 2022 and $300 million by the end of 2026. 

Anywhere conducted an initial round of layoffs in August and another in January, when it also announced the closure of its iBuying business.

Anywhere’s agent count grew 4 percent last year and the company says it posted record retention rates, but a representative declined to provide specific numbers. 

“We were able to recruit at better economics than in the past few years,” Schneider said.

Commission costs rose in the fourth quarter as top-end agents with more favorable splits represented a larger share of the company’s sales, Simonelli said. The company expects the trend to continue this year.

Commission splits last year rose 203 basis points annually, but Simonelli said 2023 splits are expected to look like last quarter, when they were up only 130 basis points year over year.

“Even with a tough and likely volatile 2023 market ahead I’m increasingly optimistic about our position and the opportunities in front of us,” Schneider said.