Despite having very few homes to sell, Douglas Elliman agents were able to scrounge up enough sales to produce a modest profit for the brokerage in the second quarter.
The company, which spun off from parent Vector Group last year, reported revenues of $364.4 million for the quarter, a 7 percent decline from the same period last year, when the housing market was at dizzying heights. Still, its revenues outpaced its expenses, with Elliman reporting $10.2 million in net income, down from $39.5 million last year.
The firm’s real estate brokerage segment reported a gross transaction value of approximately $13.6 billion, down from $15.1 billion in the second quarter last year. The average transaction was $1.7 million.
On an earnings call Friday, chairman and CEO Howard Lorber blamed a lack of supply for some of the challenges the brokerage has faced in recent months.
“The pandemic took a lot of inventory out of the market,” Lorber said. “And now it is starting to improve…. But the lower inventory sort of squeezes some of the buyers out of the market.”
While agents have pointed to rising mortgage rates as the primary reason for the housing market’s slowdown, Lorber pointed out that most luxury buyers don’t rely on 30 year fixed-rate loans to buy properties.
“I think it’s really more to do with financial volatility, then it is really the actual fact of the rates being higher,” Lorber said.
The pandemic has taken its toll in other ways on Douglas Elliman. On the call, Lorber mentioned that “unless something changes drastically,” the firm expects to consolidate its office space and will not renew some of its leases. Elliman has aggressively moved into new markets in recent years, including Texas, where the brokerage added 125 agents in the first half of 2022.
“We think that just makes sense,” Lorber said of the reevaluation.
Read more
Residential
New York
Douglas Elliman to go public in spinoff from Vector Group
Residential
New York
Public relations: What’s next for an independent Douglas Elliman?