Stock Market Fallout

On October 13th, I said that stock market turmoil would force many prospective home buyers out of the market. It turns out, on the same day I wrote that, the online discount broker Redfin announced that they were laying off 20% of their staff. Here's what they said:

Today Redfin laid off roughly 20% of our employees.

Unlike other startups, our industry’s recession started a year ago, when home prices first plunged.

Since then, we’ve fought like starving animals, and with some success: while industry-wide transaction volumes dropped 33%, we grew revenues by nearly 50%. Traffic grew more than 300%.

Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.

But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.

http://blog.redfin.com/blog/2008/10/a_very_tough_day.html

Let's hope the stock market stabilizes soon.