Anywhere Loses $107M In Q4 Amid Market, Lawsuit Turbulence

Anywhere Real Estate closed out 2023, a year marked by depleted inventory, few home sales and antitrust legal action, with a loss.

The parent company of Corcoran, Coldwell Banker, Century 21 and Sotheby’s International Realty posted a net loss of $107 million in the fourth quarter, according to its earnings report.

The loss broke the streak of two consecutive profitable quarters, but came in significantly less than the $453 million the firm lost in the same period in 2022.

Anywhere reported $1.25 billion in revenue last quarter, down six percent annually. The company posted an operating EBITDA — earnings before interest, taxes, depreciation and amortization — of $19 million in the fourth quarter, up from the $12 million reported in the same period in 2022.

The firm started cutting costs in 2022 as interest rates rose and the housing market cooled. The company said hit its $200 million year-end savings goal and plans to continue to reduce costs.

Anywhere is targeting $120 million in savings in 2024 by integrating and digitizing support services, diminishing its real estate footprint and expanding automation, according to the company’s executive vice president and chief financial officer Charlotte Simonelli.

The cost-cutting strategy is a long term solution, not a short-term fix during a struggling market, Simonelli said, and the firm doesn’t plan to scale up to its previous spending practices once the market improves.

CEO Ryan Schneider again touted its decision to settle two antitrust lawsuits over broker commissions would shield the firm from the brunt of copycat cases filed in markets across the country — but declined to share his perspective on how the agreement might affect scrutiny from the Department of Justice.

Last September, the company agreed to pay about $83.5 million to settle all claims in the Sitzer/Burnett and Moehrl class-action suits. The agreement is awaiting final approval, the hearing for which is scheduled on May 9.

“Protecting our agents and franchisees from that exposure is a really important thing,” Schneider said, adding the settlement would allow the firm to instead “spend management time and dollars on growing the business.”

“Beyond that, I don’t think we’re in the speculation business,” he added.

Despite the media attention dedicated to the antitrust lawsuits, Schneider said few agents reported receiving questions or concerns from clients and other consumers.

“I don’t think it’s really gotten in the water in a way that has led to anything meaningfully changing yet,” he said.

The firm will continue to be proactive in addressing the issues at the heart of the lawsuits, Schneider said, including expanding its use of buyer’s agent agreements.

The company noted that its annual operating EBITDA, about $200 million, would have been higher without the approximately $50 million in its litigation reserves.

While 2023 was ripe with macroeconomic and industry-related headwinds, Schneider said that the year ahead “is about Anywhere Real Estate executing on what we can control.”

He said he expects the market to pick up steam due to declining mortgage rates, possible interest rate cuts and increasingly positive consumer sentiment around housing, with most of the improvement likely reflected in the second half of 2024.

He pointed to the firm’s luxury business, including Sotheby’s, as a stronghold throughout the turmoil in 2023 and as an indicator of improving market conditions this year. He noted that listing growth in the luxury sector outpaced the market as a whole and the company’s other segments.

“The medium-term outlook for housing is quite strong,” Schneider said.