It seems like everyone is getting out of iBuying these days. At least that’s the case for Anywhere Real Estate, which recently announced that it’s exiting instant buying and implementing another wave of layoffs amid difficult economic and housing market conditions.
The real estate giant announced in a Tuesday SEC filing that it would implement “meaningful workforce reductions” while also sunsetting its iBuying brand, RealSure.
“To streamline and focus our strategic investments for today’s environment, we are winding down a few select initiatives, including RealSure,” said Anywhere CEO Ryan Schneider in a company-wide email Tuesday that Anywhere shared with RISMedia.
Schneider continued, “while excited about the potential of RealSure, given the changing market, these products are not delivering the same value to consumers.”
This makes Anywhere the latest company to exit the instant buying sector in slightly more than 12 months, joining Zillow and, more recently, Redfin, which announced the wind-down of RedfinNow in the third quarter of 2022.
“We believe that industry dynamics and customer demands will require simplified and more integrated and digitized offerings, systems and support,” Anywhere said in its Tuesday filing. “Delivering the company’s business model more digitally is an increasing part of our improving the consumer experience and our ongoing cost focus.”
While Anywhere plans to continue prioritizing investments that support its agents, franchisees and consumers—admittedly, that includes tech investment—the company acknowledged that shuttering RealSure with other unspecified initiatives would be necessary.
Sunsetting RealSure marks another blow to the iBuying sector, which has been riddled with leadership shake-ups and earning shortcomings as the housing market has cooled in the past seven months.
Aside from losing nearly $1 billion in the third quarter, Opendoor was seemingly dealt another blow as Eric Wu, the company’s CEO and co-founder, relinquished his position at the helm to run its Marketplace while President Andrew Low Ah Kee resigned.
Offerpad—the other major player in the sector—saw its three-quarter profitability streak end in Q3, and the company received a notice of non-compliance from the New York Stock Exchange (NYSE), indicating that the iBuyer was in violation of a requirement that listed stocks remain above $1 a share.
It could be delisted if it doesn’t bring it above the dollar mark.
Anywhere has been trying to weather the market changes like many in the industry. The company indicated that its latest layoffs were driven by “worsening trends in the housing market.”
While Anywhere didn’t specify how many employees would be impacted by the firings, it indicated that its workforce had been reduced by roughly 11% since late June last year. In its annual report, the New Jersey-based company reported having 9,665 full-time and 165 part-time employees as of Dec. 31, 2021.
“Yesterday, we said goodbye to a number of our great people whose roles were eliminated,” said Schneider in a company-wide email Tuesday that was shared with RISMedia.
According to Schneider’s memo, Anywhere plans to offer “good transition benefits, including severance packages and outplacement career services.”
“While these decisions are never easy, I want you to know our priority is to support our departing team members,” Schneider wrote.
Anywhere’s staff cuts come days after Compass took similar measures with a wave of layoffs of its own.
Anywhere posted a 17% decline in revenue in the third quarter of 2022, as company executives acknowledged the deteriorating housing market’s strain on its performance in recent quarters.
“As we’ve seen the housing market worsen, we increased our cost reduction even more during Q3,” Schneider said during a Q3 investors call in October.
He added, “Looking forward, as we head into a worsening housing market, we continue to be proactive in preparing for that environment. Not only have we focused on cost reduction every year for the past four years, but in both Q2 and here again in Q3, we increased our cost reduction for this year as we saw the market deteriorating.”
Anywhere indicated that Tuesday’s layoffs build on the cost reduction efforts that Schneider mentioned.
“I realize the difficulty these actions have on the affected individuals, and I do not take any decisions involving our people lightly,” he wrote in his memo. “We are grateful for their contributions to Anywhere and the time we’ve had together as colleagues, and we are focused on helping their transition as best we can.”
This is a developing story.