With inventory down and prices up, Anywhere Real Estate managed to hold pace with the subdued residential market in the second quarter.
The company posted $30 million in net income, an $11 million increase from the same period in 2023. The parent company of Corcoran, Coldwell Banker, Century 21 and Sotheby’s International Realty generated $1.7 billion in revenue last quarter, essentially flat year-over-year.
Anywhere posted an operating EBITDA — earnings before interest, taxes, depreciation and amortization — of $139 million, up $13 million year-over-year.
Transactions fell by 5 percent in the quarter from a year ago, yet dollar volume rose 3 percent thanks to an 8 percent increase in prices.
Free cash flow for the quarter was down from $105 million the same period last year to $83 million, excluding a one-time $20 million payment towards the antitrust litigation settlement.
Anywhere received final court approval for its $83.5 nationwide settlement that it put forward last year, leaving the company with $53.5 million outstanding pending the appeals process, according to Schneider.
One year ago, the brokerage conglomerate proposed a settlement to resolve two massive antitrust suits. The deal left the National Association of Realtors as a defendant and this spring proposed a settlement deal that included industry practice updates for its members beginning Aug. 17.
Schneider said that because Anywhere entered its own settlement almost a year ago, the company has used its “first mover” advantage to introduce training and operational changes to its agents in advance of the deadline.
Anywhere has rolled out “multiple buyer agreement templates so consumers and agents can select the version that best suits their needs,” which Scneider said can cover anything from touring a single home to a “multi-month journey.”
“These changes affect everyone in the industry and that means opportunity for those of us who can best embrace the new reality and help agents and franchisees navigate it successfully,” Schneider said.
He added that Anywhere’s owned brokerage websites will display offers of broker compensation, and that he believes voluntary offers of buyer compensation will help sellers “secure the best offer” for their home.
After realizing $30 million in savings last quarter, Anywhere said it would continue its cost savings push, forecasting an increase of annual expected cost reductions by over $20 million, to $120 million. Chief financial officer Charlotte Simonelli said she expects artificial intelligence to play a continued role streamlining processes and reducing costs.
The company has already rolled out AI features, Schneider noted, including automatically drafting listing details for agents and organizing documents for brokerage transactions teams.
Anywhere reported commission splits were 80.5 percent, up 40 basis points year-over-year, and the average broker commission rate declined 4 basis points to 2.42 percent for the company’s owned brokerage group, and 7 bps to 2.36 percent for Anywhere’s franchise group.
Simonelli attributed the drop in rates to Anywhere’s relatively strong luxury brand performance, and an unfavorable comparison with unusually high 2023 commission rates. Corcoran and Sotheby’s International Realty both grew their unit sales year-over-year, and Anywhere had more than 300 transactions over $10 million, a 41 percent increase year-over-year.
Schneider said he continues to believe the medium term outlook for housing should be “quite strong.”