Realogy Holdings Corp., owner of brokerage brands Coldwell Banker and Century 21, dropped to a record low as sluggish luxury home sales hurt the firm's earnings.
Shares of Realogy fell 13% to $26.62 at 12:47 p.m. in New York, after earlier slumping 15%, the biggest decline since the company's October 2012 initial public offering at $27 a share. Realogy had second-quarter net income of $92 million, or 63 cents a share, down from $97 million, or 66 cents, a year earlier, according to a statement Thursday.
Weakness at the high end of the housing market affected Realogy's NRT brokerage. The firm's top spots — California, Florida and the area that includes New York City — all suffered from lower volume in the three months ended June 30, and were down collectively about 8% from a year earlier. The three markets accounted for 60% of the unit's revenue in 2015.
"Our results for the second quarter were mixed," Realogy Chief Executive Officer Richard A. Smith said in the statement. "At NRT, a continued slowing of activity in the high-end markets and increased competitive recruiting pressures further impacted our overall transaction volume."
At NRT, company-owned brokerage operations reported 98,314 closed home sale sides, meaning clients on one side of a transaction. That was a drop of 1% from a year earlier, and the average sales price was $485,688, down 2%. The firm also cited higher competition from rivals that have been luring Realogy's top sales agents away with short-term economic incentives.
Realogy is implementing a plan to focus on retention and recruiting, Smith said in a conference call with investors Thursday.
