The layoffs come after a rapid expansion into new markets including Texas, Colorado and Idaho following a $150 million Series C funding round.
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Flyhomes, a vertically-integrated real estate brokerage and mortgage lender that also facilitates cash offers, is the latest real estate company to downsize in response to rising mortgage rates that have had a chilling effect on business.
A spokesperson for the Seattle-based firm told Inman that 20 percent of the company’s workforce was laid off Wednesday, but declined to provide additional details beyond an announcement the company posted on LinkedIn.
“The past few months have brought the largest interest rate hike in nearly 30 years, and that has impacted the demand for housing,” Flyhomes announced on LinkedIn. “The extremely difficult, but necessary, step we took today was necessary to address market conditions that have not been seen in the recent past.”
Trina Daniels, who was Flyhomes’ first hire in the Southern California market in 2019, serving as brokerage sales manager, posted on LinkedIn that 200 employees were laid off Wednesday , and that she thinks “this is just phase one” for Flyhomes layoffs.
Flyhomes is just the latest company to announce layoffs in recent months, as the Federal Reserve’s efforts to combat inflation by raising short-term interest rates send mortgage rates higher, and raise the prospect of a recession.
Although mortgage lenders have been hardest hit by layoffs, last month real estate referral and technology provider HomeLight laid off 19 percent of its workforce in June, property marketplace Sundae let 15 percent of its employees go, and Power Buyer Orchard slashed its headcount by 10 percent.
Layoffs follow rapid expansion
Launched in 2016 by Tushar Garg and Stephen Lane, Flyhomes provides end-to-end homebuying services through subsidiaries including Flyhomes Brokerage, Flyhomes Mortgage and Flyhomes Closing.
After landing $150 million in Series C funding last summer, the company went on a hiring spree, expanding into new markets including Texas, Colorado, and Idaho.
Flyhomes announced in October that it was expanding into three additional California markets and had hired its first chief revenue officer, Kayti Sullivan, formerly of Yelp and The RealReal.
Flyhomes is a pioneer of Power Buying, launching its Flyhomes Cash Offer in 2017 — short-term loans that allow homebuyers to make cash offers to sellers before refinancing into a long-term loan provided by Flyhomes or another lender.
Agent who don’t work for Flyhomes can participate in the “Flyhomes for Agents” program, but their homebuyer clients pay not only the closing costs associated with the short-term loan, but a 1 percent convenience fee.
Flyhomes for Agents is available to real estate brokerages and their agents statewide in California, Colorado, Idaho, Maryland, Oregon, Texas, Washington State, and Washington D.C.
The Flyhomes Cash Offer is offered through Flyhomes Brokerage in Washington, Texas, California, Colorado, and Oregon, with rollouts planned in Massachusetts, Utah, Maryland, Virginia and Washington D.C.
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