Real estate firms Compass and Redfin announce layoffs as housing market slows

CNBC ^ | 6-14-22 | Diana Olick

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Real estate firms Redfin and Compass are laying off workers, as mortgage rates rise sharply and home sales drop.

In filings with the Securities and Exchange Commission, Compass announced a 10% cut to its workforce, and Redfin announced an 8% cut.

Shares of both companies fell Tuesday. Redfin’s stock touched a new 52-week low.

Mortgage demand has fallen to its lowest level in over two decades. Rates have taken off since the start of this year, rising from 3.29% in early January to 6.28% now, according to Mortgage News Daily. Rates shot up more than half a percentage point in just the past three days, as concerns over inflation hit the bond market.

Rising rates and overheated home prices, which are now up over 20% from a year ago according to various surveys, have crushed affordability. Home sales have been dropping for several straight months, and the fall is expected to worsen.

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Hope you don't have an adjustable rate mortgage.

[ProtectOurFreedom]

My wife just told me one of our son’s closest friends just got laid off. He’s getting married next week and was planning to move to Denver and work remotely.

I went through a lot of these cycles in my career and it sucks. I was with one company that grew like gangbusters for ten years and then shrank for the next ten years. Every year there were layoffs and everybody felt that they were next. It is no picnic watching the attitude of employees shift from ebullient optimism about the future to nonstop pessimism. I joined Nortel Networks when it had grown to over 90,000 employees and it was at the tail-end of expansion. Then the optical communications industry got overbuilt and we hit the wall — rapid contraction, layoffs, and final the dissolution of the entire company.

Experiencing “Creative Destruction” first-hand is no fun, but you get used to it and learn how to retool yourself and bounce back.

Welcome to Bidenville.