BrokerageReal Estate

Anywhere loses $453M in Q4, sets its sights on cost efficiency in 2023

The firm recorded a net loss of $287 million in 2022

Real estate conglomerate Anywhere is no stranger to dealing with challenging and volatile housing market conditions. While the firm survived the Great Recession in 2008, executives are hoping that the firm will be able to weather the housing market shift from 2022 to 2023 a bit better.

“I am increasingly optimist about our position and the opportunities in front of us,” Ryan Schneider, Anywhere’s CEO, told investors during the firm’s fourth-quarter earnings call with investors Thursday morning. “We are laser-focused on changing how we operate our company to deliver greater efficiency and enhance our value proposition.”

Despite Schneider’s optimism, his firm has a lot of ground to make up. During the fourth quarter of 2022, Anywhere reported revenue of $1.323 billion, down 33% year over year. That resulted in a net loss of $453 million compared to a net income of $47 million a year ago. For the full year, the firm reported revenue of $6.9 billion, down 13% from 2021 — a net loss of $287 million compared to a net income of $343 million a year prior.

Executives attributed the decrease in revenue and net loss to lower home sale transaction volume and the sale of the firm’s title underwriter. Overall, in 2022, Anywhere’s franchise group, Anywhere Brands, saw the number of closed sides drop 22% year over year to 911,077, while the owned brokerage group, Anywhere Advisors, recorded a 14% annual drop in closed transaction sided to 317,600.

In the fourth quarter alone, Anywhere Brands recorded a 34% yearly drop in transaction sides, while Anywhere Advisors recorded a 29% annual decrease.

While the firm’s financial results were not the best in 2022, executives were pleased with a 4% increase in agent count and “record agent retention.” Executives also noted that commission splits were up 203 basis points year over year and they expect them to increase moving forward.

“We expect continued split pressure driven mostly by continued agent mix, as the higher producing agents who earn the highest splits will continue to drive more of our volume,” Charlotte Simonelli, the firm’s CFO, said.

Moving forward in 2023, executives said the firm’s primary focus will be cost reductions. In 2022, Anywhere recorded $150 million in cost savings, and Simonelli said the firm expects to deliver an additional $200 million in cost savings.

“The largest part of our cost structure today is tied to our operational real estate footprint,” Simonelli said. “This includes the physical brick and mortar of both our brokerage and title operation, but also the other support components, like staffing, tools and resources, and other non-agent activity. We are transforming our physical space locations, both in quantity and in the way we deliver service to agents and customers.”

Simonelli also noted that Anywhere had cut its head count by 11% from June 2022. Looking ahead, she said the firm is focused on improving technology to improve efficiencies for both agents and consumers.

“Anywhere responded to the challenging 2022 housing market with agility,” Schneider said. “We reimagined how we operate and strengthen our financial profile while continuing to make strategic progress and invest for growth in 2023.”