Shares of tech-focused real-estate agency Redfin Corp. and on-line home-buying platform Opendoor Technologies Inc. have been hit exhausting on Friday, after each firms a day earlier gave weaker-than-expected gross sales outlooks, because the housing market stays frozen in place.
Redfin
RDFN,
inventory was down 21.8%, placing it on tempo for its third-worst proportion drop since its IPO. Shares of Opendoor
OPEN,
had fallen round 20.9%, on monitor for its second-worst.
The hasty retreat for traders comes as stubbornly excessive mortgage charges and a scarcity of obtainable houses retains costs excessive and out of attain for potential house patrons, weighing on demand. Both Redfin and Opendoor have confronted steep layoffs, or a minimum of studies of steep layoffs, over the previous 12 months.
Redfin on Thursday mentioned it anticipated third-quarter income of between $265 million and $279 million. That was beneath FactSet forecasts for $280 million. Opendoor, in the meantime, mentioned it anticipated third-quarter gross sales of $950 million to $1 billion, in contrast with FactSet estimates for $1.19 billion.
“We do not anticipate any significant change in the housing market through the second half of 2023,” Redfin Chief Executive Glenn Kelman mentioned on the corporate’s earnings name on Thursday, in response to an analyst query on the state of the housing market.
“You’re absolutely right that high rates are going to limit the amount of inventory available for sellers and for buyers,” he continued. “Affordability is just going to be a huge issue.”
Redfin on Thursday additionally mentioned it misplaced market share in its most up-to-date quarter, and that it will take longer to interrupt even. Company executives attributed the shrinking market share to “one-time setbacks from agent layoffs and the closure of RedfinNow,” a phase of Redfin that purchased houses after which resold them. Redfin started winding down that phase in November.
Still, executives at each firms tried to steer Wall Street towards the positives. Redfin mentioned it anticipated to “return to quarter-over-quarter gains in the second half, as Redfin.com has been competing better for traffic.”
Opendoor Chief Executive Carrie Wheeler, in the course of the firm’s earnings name on Thursday, additionally mentioned the corporate had taken steps to handle prices and danger.
“In navigating the current environment, we’re leveraging the lessons we’ve learned and focusing on what we can control,” she mentioned.
Source web site: www.marketwatch.com
