The 2022 housing market has been fraught with challenges for most, if not all, members of the industry. Mortgage rates and home prices hit record highs and homebuying sentiment hit a record low. Navigating a turbulent market, Anywhere Real Estate reported lower revenue in the fourth quarter and overall 2022, reporting a net loss in the fourth quarter overall, according to company executives.
“Anywhere continued to be agile in the challenging 2022 housing market, prioritizing key growth investments and reinventing how we operate at a lower cost,” said Ryan Schneider, president and CEO. increase. “We remain committed to our goal of expanding our position in franchising, luxury and transactional services, with a focus on simplifying transactions for both consumers and agents.”
Anywhere’s total revenue was $1.3 billion, according to its fourth quarter 2022 earnings report, which is consistent with a 33% drop in transaction volume and a more than 30% decline in market size. . The company’s fourth-quarter net loss was driven by non-cash goodwill and franchise trademark impairments. Operating EBITDA in the fourth quarter decreased $12 million compared to a year ago.
Charlotte Simonelli, executive vice president and chief financial officer, said: And she’s an accountant.
One of the company’s key drivers, the Anywhere Brands franchise group, saw $186 billion in closed home sales and $440 billion in average home sales prices. Another major driver of his, Anywhere Advisors Owned Brokerage Group, saw $64 billion in closed home sales and $661 billion in average home sales prices. The final major driver, the Anywhere Integrated Services Title Group, saw $26 billion in purchased titles and closing units and $2 billion in refinancing titles and closing units.
Despite a meaningful third quarter, Anywhere reported operating EBITDA of $449 million on 2022 total revenues of $6.9 billion, down 13% year-over-year. In addition, the company reported a net loss of $287 million due to goodwill and franchise trademark impairments of $470 million and adjusted net income of $32 million.
Cost savings, originally targeted at $70 million, exceeded expectations to reach approximately $150 million in 2022, leaving cash on hand at $214 million. Meanwhile, free cash flow for the full year reached -$159 million due to significant negative working capital usage in the first quarter of 2022. Total completed deals volume in 2022 was also down 14% year-over-year.
“In 2022, Anywhere has a relentless focus on financial and operational performance, including delivering $150 million in cost savings through strategic actions to lay the foundation for the future,” said Simonelli. said Mr. “We continue to prioritize investments for growth while further improving the efficiency of our business … We expect approximately $200 million in 2023, including a carryover of approximately $50 million in actions taken to 2022. We expect to realize additional dollar cost savings.”
As a key driver for the company, Anywhere Brands Franchise Group saw $911 billion in closed home sales and $455 billion in average home sales prices. Anywhere Advisors Owned Brokerage Group had closed home sales of $318 billion and an average home sales price of $699 billion. Finally, the Anywhere Integrated Services Title Group saw $133 billion in purchased titles and closing units and $18 billion in refinanced titles and closing units.
The past year has seen an ever-changing market and many other challenges, but the 2023 forecast, released at the end of 2022, continues to challenge us, but the next market cooldown in a year or so. I saw a light at the end of the tunnel.
Schneider agrees, saying, “I still believe the outlook for the housing market over the next decade is strong. We have all seen a number of macroeconomic housing indicators more stable.”
“We are focused on changing how the company operates to increase efficiency and strengthen our value proposition,” Schneider continues. He explained that the company has made many changes and improvements to its systems and processes and is working to build investments and franchises.
Despite a continued weakness in the housing market in early 2023, with transaction volumes expected to decline by 30% compared to 2022, Anywhere executives believe cost controls and favorable working capital will keep operating He said he expects free cash flow to be positive.
“As we stand here today in February, we really like how the competitive environment seems to be improving. ‘ concluded Schneider. “Even in a difficult market, we prefer a flight to quality seen in a better competitive environment and growth vector, which we believe will, combined, be highly profitable when the market recovers. ”