Redfin showcased pockets of growth in the first quarter of 2024 despite challenging housing market conditions. The brokerage posted revenue of $225.5 million, an increase of 5% compared to the first quarter of 2023. But it also reported a net loss of $66.8 million, up from a net loss of $60.8 million in Q1 2023 and well above its $23 million loss in Q4 2023.
Redfin’s brokerage revenue hovered around $125 million, up 5% from a year ago. Its mortgage revenue was $34 million, down 7% from a year ago. Meanwhile, its revenue from rentals reached $50 million, up 16% from a year ago.
“Market conditions recently got worse, but Redfin got better in the first quarter of 2024,” Glenn Kelman, CEO of Redfin, said in a statement. “Each of our business segments performed at the top of the range we set last quarter, or above that range. Our plan to build a larger marketplace, based on rental and for-sale listings, is paying off. Despite spending less than our major rivals on advertising, we continue to compete well for traffic.”
Redfin’s mobile apps and website attracted nearly 49 million average monthly users, compared to an average of 50 million in the first quarter of 2023.
On another bright side, Redfin’s market share of existing-home sales by units in Q1 2024 reached 0.77%, outperforming its Q4 2023 share.
Kelman emphasized the transformative impact of Redfin Next, a program that offers commission splits of up to 75% to agents for self-sourced deals, rather than a base salary. Initially launched in Los Angeles and San Francisco, the program has expanded to include markets such as San Diego, Chicago, Connecticut, Dallas, Miami, New York and Washington, D.C., with more expansion planned for this summer. The firm has reportedly recruited more than 130 top-producing agents to join the brokerage under the Redfin Next program.
“Our brokerage sales initiatives are working,” Kelman said in a statement. “Market-share, loyalty sales and luxury sales increased, with the strongest increases in the four California markets that eliminated agent salaries in lieu of higher bonuses. Revenue improved year-over-year, gross profit improved even more, and adjusted EBITDA improved the most, which tells us that we can spend less and still make more.”
Additionally, Redfin is deploying buyer agreements nationwide through its Sign & Save program, while emphasizing agent-led tours through All You Can Meet.
Kelman also highlighted the launch of Ask Redfin, an AI-powered virtual assistant to help buyers quickly find information about for-sale homes.
Late last week, Redfin announced that it had reached a nationwide settlement agreement with the plaintiffs in the consolidated Gibson and Umpa commission lawsuits, according to a document filed with the Securities and Exchange Commission (SEC).
As part of the settlement agreement, Redfin agreed to pay $9.25 million into a qualified settlement fund within 30 days of the court’s preliminary approval of the agreement. The filing did not detail whether the firm agreed to any business practice changes as part of the settlement agreement.
Redfin joins Douglas Elliman, Realty One Group, At World Properties, Anywhere, RE/MAX, Keller Williams, Compass, HomeServices of America and The Real Brokerage in settling the commission lawsuits filed by homebuyers and sellers that allege artificial inflation of agent commissions.
The National Association of Realtors has also reached a nationwide settlement of the commission lawsuits. That agreement was granted preliminary approval by the court in late April.