{"id":4023,"date":"2023-02-22T23:49:15","date_gmt":"2023-02-22T23:49:15","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/"},"modified":"2025-03-13T02:49:27","modified_gmt":"2025-03-13T02:49:27","slug":"offerpad-right-sizes-to-navigate-the-shifting-market","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/","title":{"rendered":"Offerpad &#8216;right sizes&#8217; to navigate the shifting market"},"content":{"rendered":"\n<p><strong>Offerpad<\/strong> chairman and CEO Brian Bair told investors and analysts listening to the <a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1825024\/000119312523044822\/d470852dex991.htm\" target=\"_blank\" rel=\"noreferrer noopener\">firm\u2019s fourth-quarter and full-year 2022 earnings call<\/a> Wednesday evening that 2022 was a \u201ctale of two halves.\u201d This theme was clearly reflected in the firm\u2019s financial results for the year.<\/p>\n\n\n\n<p>After reporting its first ever profitable quarter in <a href=\"https:\/\/preprod.housingwire.com\/articles\/what-are-you-wearing-to-the-offerpad-profitability-party\/?__hstc=43385018.5f1ddc53e010c2865f96cc27f29fdd65.1672670841746.1677091704128.1677103531411.134&amp;__hssc=43385018.4.1677103531411&amp;__hsfp=1404585697\" target=\"_blank\" rel=\"noreferrer noopener\">Q4 2021<\/a>, Offerpad went on to report profits again in <a href=\"https:\/\/preprod.housingwire.com\/articles\/offerpad-turns-in-a-41m-profit-in-the-first-quarter\/?__hstc=43385018.5f1ddc53e010c2865f96cc27f29fdd65.1672670841746.1677091704128.1677103531411.134&amp;__hssc=43385018.4.1677103531411&amp;__hsfp=1404585697\" target=\"_blank\" rel=\"noreferrer noopener\">Q1 2022<\/a> and <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/ibuyer-offerpad-remains-profitable-plans-to-ratchet-up-buying\/\" target=\"_blank\" rel=\"noreferrer noopener\">Q2 2022<\/a>. However, things certainly took a turn in <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/ibuyers-struggle-in-q3-while-operating-at-peak-uncertainty\/\" target=\"_blank\" rel=\"noreferrer noopener\">Q3<\/a>, when the firm reported a net loss of $80.0 million.<\/p>\n\n\n\n<p>This trend continued in Q4, as Offerpad recorded a net loss of $121.1 million for the quarter. Its revenue dropped from $867.5 million in the fourth quarter of 2021 to $677.2 million in the fourth quarter of 2022.<\/p>\n\n\n\n<p>Overall, Offerpad reported a net loss of $148.6 million for the year, down from a $6.5 million net income in 2021. However, revenue was up 91% year over year to $4.0 billion.<\/p>\n\n\n\n<p>Revenue was not the only bright spot for Offerpad in 2022. The firm also sold 10,635 homes, a 67% annual increase \u2014 marking the first time the firm sold more than 10,000 homes in a year. In addition, Offerpad\u2019s total listing buyer and mortgage transactions grew by 90%, and cash offer requests from the firm\u2019s Agent Partnership Program were up 80%. <\/p>\n\n\n\n<p>But these bright spots were not enough to overcome the challenges the market threw at the firm.<\/p>\n\n\n\n<p>\u201cThe historic <a href=\"https:\/\/preprod.housingwire.com\/mortgage-rates\/\" target=\"_blank\" rel=\"noreferrer noopener\">interest rate<\/a> increase and <a href=\"https:\/\/preprod.housingwire.com\/articles\/housing-affordability-ends-2022-at-record-low\/\" target=\"_blank\" rel=\"noreferrer noopener\">declining affordability<\/a> left us with two significant challenges in the fourth quarter,\u201d Bair said. \u201cFirst was selling inventory acquired prior to the market shift. Second was securing additional capital to strengthen our balance sheet.\u201d<\/p>\n\n\n\n<p>During the fourth quarter, Offerpad recorded an average gross loss per home sold of $24,100, a significant drop compared to a gross profit of $29,000 in Q4 2021. However, for the full year, the firm did record an average gross profit of $17,200 per home, down 47% year over year.<\/p>\n\n\n\n<p>Despite these challenges, Bair was optimistic about the future, as the firm has only 225 homes acquired prior to September 1, 2022 remaining on its balance sheet, down from a peak of over 4,000 homes. Executives expect all of this inventory to have been sold by the end of Q1 2023.<\/p>\n\n\n\n<p>While executives are bolstered by this positive news, they are still taking action to cut costs and preserve Offerpad\u2019s bottom line. <\/p>\n\n\n\n<p>In early February, the firm announced its <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/offerpad-conducts-another-round-of-layoffs\/\" target=\"_blank\" rel=\"noreferrer noopener\">second round of layoffs<\/a> since early September \u2014and executives told investors that the firm had now cut its work force by roughly 50% from its peak in August of 2022. <\/p>\n\n\n\n<p>In addition, Bair and Offerpad CFO Michael Burnett said that the firm was shrinking its \u201cbuy box\u201d to focus on purchasing more median priced homes. Bair also noted that Offerpad would be pausing all California acquisitions at this time.<\/p>\n\n\n\n<p>\u201cIn 2023, we expect to accelerate our acquisition volume with a focus on increased penetration in more affordable markets,\u201d Bair said. \u201cIn response to the broader real estate market slow down, we reduced the pace of our acquisition and the size of our team.\u201d<\/p>\n\n\n\n<p>Bair said the firm will also focus on further developing its business-to-business partnerships and services, including Offerpad Renovations and Offerpad Direct Plus for investors.<\/p>\n\n\n\n<p>\u201cWith the business now right-sized and more in line with our expectations for 2023, we are positioned to efficiently and effectively execute against our operating plan,\u201d Burnett said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For Offerpad, 2022 was a &#8220;tale of two halves.&#8221; To tackle 2023, the iBuyer has halved its workforce and is pausing Californian acquisitions.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-4023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Offerpad &#039;right sizes&#039; to navigate the shifting market<\/title>\n<meta name=\"description\" content=\"For Offerpad, 2022 was a &quot;tale of two halves.&quot; To tackle 2023, the iBuyer has halved its workforce and is pausing Californian acquisitions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Offerpad &#039;right sizes&#039; to navigate the shifting market\" \/>\n<meta property=\"og:description\" content=\"For Offerpad, 2022 was a &quot;tale of two halves.&quot; To tackle 2023, the iBuyer has halved its workforce and is pausing Californian acquisitions.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/\" \/>\n<meta property=\"og:site_name\" content=\"RealTrends - Blog\" \/>\n<meta property=\"og:image\" content=\"https:\/\/preprod.realtrends.com\/blog\/wp-content\/uploads\/sites\/9\/2025\/03\/9ced5ef4-69ab-4ba7-a7cd-ec49be7b274d.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Brooklee Han\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brooklee Han\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/preprod.realtrends.com\/blog\/2023\/02\/22\/offerpad-right-sizes-to-navigate-the-shifting-market\/\"},\"author\":{\"name\":\"Brooklee Han\",\"@id\":\"https:\/\/preprod.realtrends.com\/blog\/#\/schema\/person\/2b55f26feb7e41850f027ef471162adb\"},\"headline\":\"Offerpad &#8216;right sizes&#8217; 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