MADISON, NJ—Realogy Holdings Corp., owner ofthe Coldwell Banker, Century 21 and Soheby's Internationalresidential brokerage brands, posted a wider-than-expected loss forthe first quarter on industry-wide declines in mortgage refinancingas well as a year-over-year slide in its own transaction volume.The Madison, NJ-based holding company, which operates 13,600 ownedand franchised offices in 104 countries, posted a net loss of $46million, or 32 cents per share; analysts polled by Thomson Reutershad predicted a loss averaging 19 cents per share. However, the netloss was down more than 33% Y-O-Y from $75 million in Q1 2013.

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“We saw two opposing trends in the first quarter that caused anoverall shift in Realogy's mix of business resulting in a higheraverage sale price and reduced transaction sides,” says CEORichard Smith. “Demand at the higher price pointsin markets served by our franchisees and company-owned brokerageswas strong, while difficult credit standards and rapid home priceappreciation, primarily caused by low inventory levels,constrained activity at the entry level of the housing market.” Theaverage sale price rose 13% Y-O-Y, while volume eroded by 3%.

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On a conference call with analysts Monday morning, Smith said2014 could be “a challenging year, especially if transaction volumegrowth continues to slow throughout the prime selling season.”Compounding the challenges of low inventory at the first-timehomebuyer and move-up buyer levels are “tough credit underwritingand the effects of a sluggish economy, which we believe has sloweddemand.”

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The company expects refinancing volume to remain constrainedthrough the balance of the year, and Q2 home sales volume to be offbetween 5% and 7% across both its franchised and owned units.Conversely, it expects average sale prices to rise by a similarpercentage during the quarter.

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“As we have moved into our spring selling season, thus far thelevel of open activity we expected has not materialized,particularly as it relates to home-sale transaction sides,” saysAnthony E. Hull, Realogy's EVP, CFO and treasurer.“Having said that, we expect our aggregate number of home-saletransaction sides to increase sequentially from 260,000 in thefirst quarter of 2014 to between 367,600 to 375,500 in the secondquarter.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.