Source: Seattle Times —
Seattle’s real estate tech companies are feeling the effects of the cooling housing market on their bottom lines.
Despite cutbacks and layoffs in 2022, year-end earnings reports from Zillow and Redfin showed substantial losses and declines in gross profit.
The results reflect the chill that hit the housing market last year, as interest rates shot up and kept many prospective homebuyers from shopping. Nationwide, the number of home sales dropped 18% from 2021 to 2022, according to the National Association of Realtors.
The market shift was “the scenario we had feared could happen,” Zillow CEO Rich Barton told investors Wednesday. “Thirty-year mortgage interest rates nearly doubled … meaningfully slowing turnover and home-price appreciation in the housing market.”
Both Seattle-based companies faced plummeting share prices and financial challenges while attempting to flip houses over the last two years.
Zillow, which operates a listing site and sells exposure on its site to real estate agents, reported a net loss of $101 million in 2022. That was a vast improvement from 2021, when the company shuttered its house-flipping business, began laying off a quarter of its staff and reported a year-end loss of $528 million.
;
