Dwindling Housing Market Leads to Industry Layoffs

As inflation worsens and mortgage rates rise, homeowners aren’t the only ones taking hits. Last week Glenn Kelman, the CEO of RedFin, sent out a company-wide email detailing a number of layoffs and the reasoning behind them. The number of employees at RedFin has already dropped by 27 percent since April and this month the company is looking at removing another 862 positions; which is another 13 percent decrease.1 This comes as the company decides to close its iBuyer subsidiary RedFinNow. The site allowed homeowners to sell their homes as-is to RedFinNow, which would then fix up the home to be sold on RedFin. The company has deemed this venture too risky, and is now shifting their focus towards their, “…original calling: getting people a higher, not a lower, price for their homes, at a 1% fee, and supporting people through their entire move, from the mobile application to the agent…”1

RedFin isn’t the only company looking to make cuts as a result of the dwindling housing market. According to the National Association of Realtors, the rate of existing home sales has declined 23.8 percent from September 2021 to September of this year.2 This has led both Zillow and LoanDepot to lay off a number of their staff. Last month Zillow, a competitor of RedFin, fired about 300 employees, which was five percent of the company’s workforce.3 Last year, the company announced they were planning on laying off a quarter of their staff due to their house-flipping unit costing them more than 420 million dollars.3 Similarly, back in July the mortgage company LoanDepot said they would be removing 4,800 positions this year.3

Although things may seem dire now, Kelman still holds out some hope about this situation. In closing out his email, the RedFin CEO stated, “But those of us still here tomorrow will have remained for a reason, united by a now-ancient belief that…the only thing more inevitable than love’s failures are its triumphs.”1

With predictions showing this downturn in the market could last through 2023 this hope may be misplaced, but a cyclical market means triumph is always on the horizon.

Molly Mellon // CIRB Journalism Intern

1 See Kelman, “All-Hands Email on November Layoff”

2 See Hyman, “Existing-Home Sales Drop for the Eighth Straight Month and Decline 1.5% in September 2022”

3 See Brooks, “Redfin lays off 862 employees as housing market cools”