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Redfin announced on Wednesday that it is laying off 13% of its workforce and closing its RedfinNow home sales business amid a booming housing market.

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Approximately 862 workers who were renovating RedfinNow homes will be laid off as part of the latest online broker cuts, CEO Glenn Kelman said in a SEC statement.

Kelman said that Redfin will still need home maintenance staff for its concierge service to “tweak brokerage client lists, but since this group has spent most of its time renovating RedfinNow homes, it will become a lot smaller.”

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THE HOUSING MARKET IN THE UNITED STATES IS APPROACHING TO A STRONG SLOWDOWN

Kelman acknowledged that additional layoffs are “terrible,” though inevitable due to the current economic climate. Redfin has already reduced staff by 27% since April.

In June, the Seattle-based real estate brokerage laid off 8% of its employees “in response to our expectations that we will sell fewer homes in 2022” amid the market crisis, Kelman said. However, the latest layoff “suggests the recession will last until at least 2023,” he added.

REDFIN DESTROYS 8% OF EMPLOYEES, PREDICTING YEARS LESS HOUSE SALES BECAUSE OF HIGH RATES

Analysts at Morgan Stanley already predicted last month that home prices could fall another 7% by the end of 2023. Although less than the 27% drop seen when the mortgage bubble burst more than a decade ago, it would still be the second fastest drop. decline since the Great Depression.

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The investment bank blamed the expected decline on fast-rising mortgage rates.

Mortgage buyer Freddie Mac said last week that the average rate on 30-year loans is about 7%, compared to 3.86% a year ago.

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“We plan to keep increasing our market share, but that market in 2023 is likely to be 30% smaller than it was in 2021,” Kelman said.

The company also laid off 218 employees who have the option to stay at Redfin in other positions. If all of those employees leave, Redfin’s overall staff cuts will be 16% in November and 29% since April, the company said.

Megan Henny of FOX Business contributed to this report.