Redfin's losses and gains amid advertising push

Redgin CEO, Glenn Kelman predicts a "modest" housing gain coming to the company.

Redfin’s losses widened to $42 million in 2018, as the discount brokerage invested heavily in direct advertising to fuel its growth.

Despite the slowing housing market, the Seattle-based firm said that its revenue soared 32 percent year over year in 2018 to $486.9 million.

“We believe the housing market is getting stronger,” CEO Glenn Kelman said during an investor call on Thursday. “Despite regional setbacks — and the many federal workers in the Washington, D.C. area who spent January waiting for a paycheck — homebuyers seem more confident now than they did during the second half of 2018.”

On a quarterly basis, Redfin’s losses widened to $12.2 million during the fourth quarter, compared to $1.8 million in the prior-year period. However, Redfin’s revenue rose 30 percent to $124.1 million.

Redfin projected a net loss between $69.2 million and $67.8 million for the first quarter of 2019 (compared to $36.4 million during 2018’s first quarter.) “Our 2019 ad campaign will increase this year’s losses,” Kelman said. “The ads should accelerate 2019 revenue growth and contribute to profits by 2021.”

Redfin is a real estate brokerage that uses modern technology to help people buy and sell homes. The Seattle-based company was founded in 2004, and went public in Aug. 2017. Glenn Kelman is the CEO. Redfin's business model is based on sellers paying Redfin a small fee, in the 1-2% range. Buyers are given a small portion (usually 0.5%) of this fee by Redfin.

Read more here

Join us in Bangkok the 19th to the 21st of March for the Property Portal Watch Conference.