Real estate giant Redfin beats Q2 estimates with $214M in revenue; CEO says ‘we’re inside a tornado’

(GeekWire Photo / Nat Levy)

Seattle-based real estate company Redfin topped Wall Street estimates for its second quarter earnings, reporting $214 million in revenue, up 8%, and a net loss per share of $0.08. Analysts expected revenue of $186 million and EPS of -$0.24.

The real estate market is on a roller coaster this year as buying activity slowed due to the pandemic but has rebounded in recent months.

“Within the span of a single quarter, year-over-year changes in demand went from -41% to +40%, a level of volatility that I have never seen in nearly 30 years of business,” Redfin CEO Glenn Kelman said in a statement. “Over the past two months, Redfin’s online visits and customer inquiries have been growing at a faster rate than at any point in the last three years. We’re inside a tornado, hiring agents, lenders and closing specialists at breakneck speed to keep up with demand, but also mindful that the bottom of the economy could fall out a second time.”

It’s quite a turnaround for Redfin, which laid off 7% of its staff and furloughed hundreds of agents in April. The company has hired most of the furloughed employees back and resumed hiring in several markets “to meet resurgence of customer demand.”

However, shares were down more than 4% in after-hours trading. After a big dip in March, Redfin’s stock price had quadrupled.

The Seattle-based real estate giant published a report last week showing a “strong” U.S. housing market, with listing prices up 13% and closed sale prices up 6% during the four-week period ending July 12. Total number of homes for sale was down 28%, “further exacerbating the imbalance between supply and demand,” Redfin noted.

Data from Realtor.com shows 18 of the top 50 U.S. real estate metros returning to or passing pre-pandemic levels of market activity, The New York Times reported.

Redfin has rolled out various digital tools such as virtual tours, video appointments with agents, and more to help adjust for social distancing mandates amid the pandemic. It also expanded its Direct Access program that lets buyers to self-tour vacant homes listed by Redfin agents.

The company said today that nearly half of surveyed homebuyers made a bid on a home without first seeing it in person, up from 28% in 2019. “Redfin agents cite health concerns around the pandemic and competition fueled by a worsening housing shortage as reasons more buyers are bidding on homes before visiting them,” the company wrote in a blog post.

Redfin last month resumed its RedfinNow home-buying business after pausing it due to the pandemic.

Redfin had 3,377 total employees as of Dec. 31, and employed more than 1,500 lead agents.

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