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Realeflow’s latest listing prediction solution is ready for rollout

Realeflow’s latest listing prediction solution is ready for rollout

Realeflow, a software company that applies AI-backed predictive analysis and machine learning to identify seller activity, has released a new version of its Sellability Score AI model.

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Realeflow, a software company that applies AI-backed predictive analysis and machine learning to identify seller activity, has released a new version of its Sellability Score AI model, Inman learned in a Feb. 27 press release.

The company said its software, now in its 11th generation, can help investors and agents recognize a person’s probability to sell within 90 days “for almost every residential property in the United States,” by processing 136 billion data points assembled from more than 40 years of sales data married to corresponding demographic and socioeconomic metrics.

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In addition to compounding its existing, 10-generation knowledge base, the newest iteration of the software is leveraging insights gained from the unique nature of the “pandemic market,” according to the release. Apparently, pre-pandemic market characteristics are resurfacing, specifically the rate of foreclosures, which all but stalled during COVID-19.

Realeflow has also found that the “exodus” interaction data influence is increasing, meaning the number of people in a household who contribute to a mortgage payment. “After reaching 40-year lows in 2020 and 2021, divorce rates have increased,” the release stated. Household separations have long been a lead indicator for the real estate industry, along with death and number of children, among other family status changes.

Investors can search according to location, price and square footage to receive three scores for each potential property’s status within the next 90 days. Those scores include the “retail score,” equating to the probability of a home selling close to its estimated value; the “wholesale score,” rating the probability of a property selling at a discounted price; and the “rental score,” which evaluates a property’s ability to be rented.

Marketing to subject property owners is then carried out in-app via email marketing, direct mail and social media, with bespoke campaign content and frequency using Realeflow’s Leadflow product.

“Timing is everything in real estate and it’s always the seller’s timing that matters,” said Realeflow founder and CEO Greg Clement in an email to Inman. “Even in this market, there are people that are making the decision to sell daily. AI is solving the timing problem better than anything else. It’s aligning sellers and buyers faster than ever before.”

Using AI to engage buyers and sellers, uncover opportunities and market value propositions to consumers is nearly ubiquitous, and thus, a much easier sell for software companies than it was only a year ago. The applications of AI are no longer esoteric or bleeding edge but table stakes for any proptech hoping to keep pace with a rapidly more informed consumer base, especially real estate investors, who are hunting incessantly for that next great flip or long-term hold. Tools like Realeflow can help them stay ahead of more pedestrian tactics.

The market’s slow sales growth is a boon for investors who can find the right single-family home or rehab project, as high home prices and interest rates are keeping many would-be buyers locked into leases, even in the midst of a softening rental market.

“The once-hot rental market has been stabilizing and softening year-over-year since May 2023, mostly from a surge in new rental options coming to the market that gave renters more to choose from,” Realtor.com Chief Economist Danielle Hale said in a written statement.

A new Realtor.com survey revealed the break in rental increases won’t provide enough financial leeway for renters to make the transition to homeownership.

“But the surge in rents and the sheer number of renters, many of whom have held off on buying in recent years, continue to minimize any potential price impacts that increased rental inventory could have on the market,” Hale said.

In short, single-family landlords and multi-family investors appear to have a solid market ahead of them for the time being.

Email Craig Rowe

Compass lifts agent count in Q4 but falls short of positive cash flow

Compass lifts agent count in Q4 but falls short of positive cash flow

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Compass didn’t manage to become cash flow positive in 2023 as it had hoped, but it did nevertheless manage to buck a tough market and hold off major revenue losses in the fourth quarter — while also growing its agent count at a time when overall Realtor ranks are shrinking across the industry.

In total, Compass brought in $1.1 billion in revenue between October and December of 2024, according to a newly published earnings report. That represents a 1 percent year-over-year dip. The company also lost $83.7 million in the quarter, which is a 47 percent improvement over the loss of $158.1 million one year earlier.

For all of 2023, Compass brought in $4.9 billion in revenue, down from $6 billion in 2022. Compass suffered a net loss of $321.3 million for all of 2023, compared to $601.5 million in 2022.

In previous earnings reports, company founder and CEO Robert Reffkin repeatedly mentioned a goal of becoming free cash flow positive for 2023. However, Tuesday’s report shows that Compass fell just short of hitting that target; free cash flow was negative $37.1 million for 2023. However, that still represents a significant improvement over the negative $361.8 million in free cash flow Compass had in 2022.

Compass now expects to become free cash flow positive in 2024.

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Robert Reffkin

In the report, Reffkin said his company has “successfully navigated the worst residential real estate market in decades and significantly reset our operating expense levels, positioning Compass for what we believe will be significant upside when the market begins to recover.”

“As we reduced operating expenses, we continued to invest in growth, our agents and our technology platform, the industry’s only proprietary first-contact-to-close platform,” Reffkin added.

During a call with investors Tuesday afternoon, Reffkin said the 2023 market had the “lowest level of home sales since 1995.” But he added that “despite these massive headwinds, we have positioned Compass for significant upsides when the market begins to recover.”

Tuesday’s report further reveals that Compass’ transactions declined 4.9 percent in Q4, which the company framed as a victory compared to the 9.2 percent decline that took place across the broader industry. Compass agents closed a total of 40,621 deals in the fourth quarter.

Compass transactions fell 15.5 percent for all of 2023, compared to 18.7 percent for the broader market, the report notes.

Despite lower revenue and transactions, however, Compass managed to increase its principal agent headcount by 7.7 percent in the fourth quarter compared to the same period a year earlier. Agent count also increased 4.5 percent compared to Q3 of 2023. In total, Compass had an average of 14,689 principal agents in the fourth quarter of 2023.

The company additionally reported an agent retention rate of 97 percent in the final three months of 2023.

Those numbers are significant because Compass’ rapid growth and aggressive recruiting have made it the largest company of its kind in recent years — despite its relatively recent founding just over a decade ago. At the same time, in 2022, the brokerage ditched lucrative stock and cash-based incentives for new agents. The move raised questions about Compass’ ability to sustain growth going forward.

Despite those questions, however, the company has consistently managed to increase its principal agent count, and Tuesday’s new numbers show that the streak continues.

In the report Tuesday, Reffkin noted that Compass has “recruited more than 2,000 principal agents without cash or equity sign-on incentives since eliminating those incentives in August 2022.” He added during the investor call that of the agents who have recently joined the brokerage, “over 80 percent point to our Compass technology platform, which makes them more productive.”

Heading into Tuesday’s earnings, shares in Compass were trading in the mid $3 range. That was up for the day, but roughly even compared to where the company began 2024, as well as where its shares were one year ago.

Shares fluctuated Tuesday in after hours trading following the earning report’s publication, but ultimately trended up — buoyed perhaps by improvements in losses, free cash flow and agent count.

Credit: Google

Compass had a market cap of about $1.65 billion when markets closed Tuesday afternoon.

Compass last reported earnings in early November. At the time, the brokerage revealed that it brought in $1.34 billion in revenue between July and September last year. That was down 10 percent compared to the third quarter of 2022. But despite the dip in revenue, Compass managed to improve Q3 losses significantly.

In addition to financial numbers, Tuesday’s report also shows that Compass’ U.S. market share stood at 4.41 percent in Q4. That’s a year-over-year increase of 9 basis points, according to the report.

During Tuesday’s call, Reffkin briefly mentioned the various commission lawsuits that challenge the way agents get paid. The most famous of these cases, which went to trial in October, is known as Sitzer | Burnett and does not involve Compass. However, subsequent “copycat” cases have named Compass. The lawsuits have been a dominant story in real estate over the last year.

Reffkin declined to comment directly on the cases themselves, but did say Compass is “actively engaged in helping agents demonstrate their value.” He also said Compass has implemented training related to buyers’ agreements that outline agent pay, and that last fall the brokerage developed “buyer’s presentations” that are meant to articulate agents’ value.

Reffkin said the industry’s failure to create buyer presentations sooner is what resulted in many consumers not understanding the value agents bring to a transaction.

Asked if such measures are enough of a response to pressure on the industry — including from the U.S. Department of Justice — Reffkin responded in the affirmative.

“It alleviates my concern,” he said, “on any financial risk on the topic.”

Later on the call, Reffkin weighed in on the market, sharing a relatively optimistic vision of what might unfold in 2024. He said that 2023 was the “bottom of the market,” and noted that fewer people are “locked in” to their current homes due to mortgage rates this year compared to last. He also argued that many people have delayed and deferred moving for a year and half. Now, Reffkin added, there’s pent-up demand and people are ready to act.

“What I believe,” Reffkin said, “is that people are tired of waiting.”

Update: This story was updated after publication with additional information from Compass’ earnings report, and with commentary from the company’s investor call. 

Email Jim Dalrymple II

Mark Willis takes aim at Anywhere in ‘State of the Company’ remarks

Mark Willis takes aim at Anywhere in ‘State of the Company’ remarks

In his first Family Reunion address since returning as CEO of Keller Williams last year, Mark Willis called on agents to rise up and topple Anywhere, the world’s largest real estate franchisor.

The moment has arrived — the moment to take charge. This summer, at Inman Connect Las Vegas, July 30-Aug 1, 2024, experience the complete reinvention of the most important event in real estate. Join your peers and the industry’s best as we shape the future — together. Learn more.

Keller Williams’ 2023 was a mix of roses and thorns, with the Texas-based franchisor handily securing their position on multiple “best of” lists for leadership, company culture, agent production and technology all while being mired in two landmark buyer-broker commission lawsuits, both of which the company settled on Feb. 1 for $70 million.

The company’s agent count remained steady with 162,000 agents across the U.S. and Canada closing 895,000 transaction sides worth $379 billion. Meanwhile, Keller Williams Worldwide’s 18,000 agents closed 87,000 transaction sides worth $17 billion.

Mark Willis

Although the company outperformed the rest of the industry in agent count growth based on National Association of Realtors statistics, Keller Williams CEO Mark Willis said the Texas-based franchisor had flat agent count growth in 2023 — a sobering statistic for a company that’s known for robust recruitment and retention.

“KW family, our growth was flat and we did not capture additional market share,” he said during his first KW Family Reunion State of the Company address in eight years. “I remember a time and I know many of you do too when we would routinely outperform the industry year in and year out.”

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Willis attributed lackluster growth to elevated mortgage rates, worsening affordability, low inventory, and several other macroeconomic headwinds that suffocated sales throughout 2023. The record rise in new agents over the past several years didn’t help either; leading to an incredibly competitive market.

“Now I could get up here, I can talk about the models that position us to thrive in this market. Because believe me, they do,” he said. “Our economic model, our operating model, our organizational model that absolutely set us apart from every single competitor we have.”

“That’s not to mention all of our wonderful education through KW and our amazing technology platforms,” he added. “But if I’m being honest with you it isn’t enough. For a mature company like ours, we need to do more.”

Echoing the insights from his Inman Interview a few days before the conference, Willis challenged agents to “reject the status quo” and regain an “insatiable hunger” to be the real estate experts buyers and sellers count on. He also called on leadership to fulfill a goal of recruiting 100,000 agents this year, which would account for one-fifth of the new agents that are expected to get their licenses in 2024.

“For all the leaders in the room, I want to be really clear, that priority is 1,000 percent focused on growth. Growth is the lifeblood of our business,” he said. “KW family, if half a million new agents enter the industry this year,
we should recruit a minimum, a minimum of 100,000 of them.”

Willis said Keller Williams’ leverage lies in its expanding agent education empire with Coursera and Kaplan, and its sweeping proprietary technology platform KW Command.

Chris Cox

Keller Williams Chief Technology Officer Chris Cox joined Willis onstage to announce several upgrades to KW Command and education platform KW Connect, namely the addition of a ChatGPT-esque chatbot that will debut later this year.

“Imagine this. What if we were able to put all the wisdom of “The Millionaire Real Estate Agent” or “SHIFT” and all of our other playbooks into one gigantic resource library with our version of ChatGPT?” he said. What if we could make that available in Command and Connect in a chatbot format and give our agents and teams the ability to have all that information right at their fingertips? Well, that’s exactly what we’ve been working on.”

“AI is only good if it’s making you more intelligent,” he said. “If it’s not actually saving your time and helping you make more money, it’s not worth it.”

Cox also touted the addition of a proprietary tool that predicts how many buyers and sellers will enter a given market, new collaboration tools on KW.com such as an affordability calculator and home valuation tool. Willis and Cox said all of these upcoming tools will be key to getting KW back on track.

“We’ve built technology for agents by agents [and] there is absolutely no limit to what we can do to reimagine how we work, how we sell and ultimately how we grow,” Cox said.

If all goes according to plan, Willis said KW is on track to match — and even surpass — New Jersey-based real estate giant Anywhere in market share based on agent count.

“We have yet another Goliath to topple. Our single brand of Keller Williams will be larger than the seven combined brands of Anywhere. It is within reach,” he said to applause and cheers from the audience. “We are within two market share points of toppling that Goliath that represents seven brands that are household names.

“We have brand recognition that is second to none, and we will prove it with more agents, more signs, more market share, and more referrals,” he added. “I believe that we will when we are the best culture that has ever existed. Our destiny is to be the largest real estate entity on the planet.”

LeFrak sues NYC housing court as evictions slow to ‘surreal’ crawl

LeFrak sues NYC housing court as evictions slow to ‘surreal’ crawl

The LeFrak Organization claims that the courts have failed in their duty to hear housing disputes efficiently and fairly.

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A major New York City landlord is suing the city’s Office of Court Administration and City Court, arguing that landlords are being unfairly burdened by the city’s inefficient housing court.

The LeFrak Organization, which owns over 60,000 apartments throughout New York City, including in the sprawling LeFrak City complex in Queens, claimed in a court filing that the delays that have become routine since the pandemic-era eviction moratorium expired have caused landlords an unfair burden and that the courts have failed at their duty to hear housing disputes efficiently and fairly.

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Landlords have been forced to merely accept the game as rigged and trudge along the nightmarish procedure of Housing Court in the hopes that one day, far in the future, they will be able to retake and make their property economically viable once more,” LeFrak’s complaint reads.

The complaint alleges that the court system has failed to find a way to deal with the backlog of cases that has piled up since the eviction moratorium expired in January 2022. Delays are exacerbated as judges postpone cases to allow tenants to find counsel, which they are guaranteed free of charge under New York’s right-to-counsel laws. Such actions typically result in cases being delayed an additional four months, the complaint states.

When evictions are ruled, landlords can wait “months on end” for an eviction warrant to be formally issued, LeFrak claims, which it argues undermines property rights and deprives owners of their right to “a simple, expeditious and inexpensive means of regaining possession” of their property.

LeFrak’s attorneys asked the Queens County Supreme Court to rule that trial dates be set within three to eight days, adjournments be granted only if a landlord or tenant explicitly asks for one, and that eviction warrants be issued immediately.

The complaint was first reported on by the New York Law Journal. 

The OCA did not respond to a request for comment.

LoanDepot hackers had access to Social Security numbers, DOBs

LoanDepot hackers had access to Social Security numbers, DOBs

The lender is offering 24 months of free identity protection services and credit monitoring from Experian to 16.9 million consumers affected by the January cyberattack.

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Mortgage lending giant loanDepot says hackers gained access to the sensitive personal information of nearly 17 million people last month, including email addresses, financial account numbers, Social Security numbers, phone numbers and dates of birth.

LoanDepot is offering 24 months of free identity protection services and credit monitoring from Experian to those affected by the January cyberattack, which the ransomware group ALPHV/Blackcat claimed responsibility for on Feb. 16.

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Irvine, California-based loanDepot disclosed to investors Tuesday that it expects to incur $12 million to $17 million in expenses during the first quarter related to the cyberattack and has been named as a defendant in several lawsuits, which the company does not expect will have a material impact on its results.

LoanDepot had previously disclosed that as many as 16.6 million customers may have been affected by the cyberattack. A Feb. 23 filing with Maine regulators puts the number affected at 16.9 million and provides additional, previously undisclosed details.

Attorneys for loanDepot told the Office of the Maine Attorney General that the data breach occurred on Jan. 3, was discovered by loanDepot the next day and lasted until Jan. 5.

LoanDepot did not disclose the breach publicly until Jan. 8 and has reported on a cyber incident update page that it was still working on restoring its loan origination and loan servicing systems on Jan. 22. A loanDepot spokesperson told Inman the company’s systems were fully restored later that week.

In a Feb. 23 notice to consumers, loanDepot said the incident “may have impacted your name, address, email address, financial account numbers, social security number, phone number, and date of birth.”

“Although we have no evidence at this time that your information has been misused for identity or fraud as a result of this incident, to help protect your identity, we are offering you 24 months of identity protection services and credit monitoring from a leading identity monitoring services company, Experian, at no charge,” the notice said.

LoanDepot, which employs more than 4,500 workers, made nearly $24 billion in home loans in the 12 months ending Sept. 30 and was collecting monthly mortgage payments from 490,000 borrowers who owed $144 billion in mortgage debt. During the first quarter of 2023, loanDepot transitioned its servicing portfolio to an in-house platform to reduce servicing expenses.

The FBI blames ALPHV/Blackcat and its affiliates for compromising over 1,000 businesses and government entities to extort nearly $300 million in ransom payments. Companies in the real estate industry that have been hit with similar security breaches include Fidelity National Financial and First American Financial, the nation’s two largest title insurers, and mortgage servicing giant Mr. Cooper.

In the latest incident, ALPHV/Blackcat is being blamed for a breach that’s made it difficult for pharmacies to fill many prescriptions for the past week, Reuters reported Monday.

The FBI has developed a decryption tool that it’s offering to victims to help restore their systems, which has saved dozens of victims from ransom demands totaling approximately $99 million, the State Department said on Feb. 15 when announcing up to $15 million in rewards aimed at stopping the group.

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Email Matt Carter

Rent is falling fastest in markets that added the most new supply

Rent is falling fastest in markets that added the most new supply

Rent is now 0.7 percent lower for one-bedroom rentals nationwide than it was a year ago, but not in all markets, new report shows.

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For the second time in three years, the monthly cost of a one-bedroom rental was lower than it was a year ago, according to a new report released Tuesday that showed that the era of unprecedented rent increases is over for much of the country. 

The national price of a one-bedroom rental fell 0.7 percent in February. It ticked up 0.7 percent for two-bedroom rentals, according to the new report from Zumper. That increase is below the typical U.S. annual rent increase.

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The report is only the latest to find that markets that added the most supply are seeing rent fall fastest, typically in the Sun Belt and across the West, while markets in the Midwest and Northeast that didn’t add as much supply are seeing rent continue to rise.

“With record apartment supply hitting the U.S. market, renters have more options to choose from so property owners are even more incentivized to retain tenants since units may sit empty for longer in current conditions,” Zumper CEO Anthemos Georgiades said. “If a renter wants to avoid the hassle of moving or wants to wait out the uncertainty of the current economy, staying in place will likely mean a minimal rent increase this year, if any.” 

While it’s typically common for tenants to face rent increases when renewing their leases, the added supply in many markets means property managers have less leverage to increase the cost of rent upon renewal, Zumper said.

February was the fifth consecutive month of flat or negative monthly changes in rent nationwide, according to the Zumper index.

A one-bedroom rental cost $1,482 in February, while a two-bedroom apartment cost $1,837, Zumper said.

Not every market is experiencing a slowdown, however. New York City, Chicago and Cleveland — cities that added relatively little supply compared to demand — saw rent rise about 20 percent year-over-year, Zumper said.

Meanwhile, Austin and Dallas, which have added a significant amount of apartment supply in recent years, saw rent fall 10 percent year-over-year.

Email Taylor Anderson