Two major real estate firms announced layoffs this week, both of which have a strong presence in the Bay Area.
Compass reduced its workforce by about 450 people across the country, although SFGATE would not confirm how many in the Bay Area were affected. Those fired were full-time Compass employees, not real estate agents.
“With clear signs of slowing economic growth, we have taken a number of measures to protect our business and cut costs, including halting expansion efforts and making the difficult decision to reduce the size of our workforce by approximately 10%,” a Compass spokesman said SFGATE. Compass is headquartered in New York City.
In its most recent Bay Area real estate report, Compass reported that rising interest rates are hurting Bay Area home sales – overall sales are declining and the number of active listings and discounts is increasing. Still, the report resisted drawing any drastic conclusions, writing, “As an analogy, when traffic drops to 65 at 100 mph, it feels much slower, but cannot reasonably be described as slow.”
Redfin, a Seattle-based brokerage firm, has cut about 6% of its workforce, a company spokesman told SFGATE. That’s about 470 employees, including some from Rentpath and Bay Equity, two of the company’s subsidiaries. Glenn Kelman, CEO of Redfin, wrote in a statement: “With demand in May coming in 17% below expectations, we don’t have enough work for our agents and support staff, and reduced sales leave us with less money for projects at HQ return.”
As mortgage rates continue to rise, there are signs that the red-hot housing market nationwide is finally slowing down. Interest rates have risen from around 3% in early January to over 6% now.