The Real Brokerage, Inc. (NASDAQ:REAX) Q4 2022 Earnings Conference Call March 16, 2023 11:00 AM ET

Company Participants

Jason Lee - VP, Capital Markets & IR

Tamir Poleg - Chairman & CEO

Michelle Ressler - CFO

Conference Call Participants

Darren Aftahi - ROTH MKM

Wyatt Swanson - D.A. Davidson

Chris Sakai - Singular Research

Brian Kinstlinger - Alliance Global Partners

Operator

Good morning, ladies and gentlemen, and welcome to The Real Brokerage Fourth Quarter and Full-Year 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we'll open the floor for your questions and comments after the presentation.

I will now turn the call over to Jason Lee, Vice President of Capital Markets and Investor Relations at The Real Brokerage. Sir, the floor is yours.

Jason Lee

Good morning, everyone, and thank you for joining us today for Real's fourth quarter and full-year 2022 earnings call. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer; and Michelle Ressler, our Chief Financial Officer.

This morning, Real filed its financial statements and Management Discussion and Analysis for the fourth quarter and full-year ended December 31, 2022, on SEDAR and EDGAR. These documents, along with the accompanying earnings press release can be found on both SEDAR and EDGAR.

Before I turn the call over to Tamir, I'd like to remind everyone that the company will be making statements about its future results and other forward-looking statements during this call. Our actual results may differ materially from these forward-looking statements and the Risk Factors that could cause these differences are detailed in our Canadian continuous disclosure documents and SEC reports. Real disclaims any intent or obligation to update these forward-looking statements except as expressly required by law.

Now, with that, I'd like to turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed.

Tamir Poleg

Good morning, and thank you, Jason.

2022 was a challenging year for the housing market, with Q4 as the weakest quarter across the industry. A key driver was the title policy implemented by the Federal Reserve in response to the persistent inflationary pressures, which resulted in seven increases to the policy interest rate during the year, pushing average 30-year mortgage rates above 6% for the first time since 2008. The corresponding hit to buy affordability and seller incentive to give up their lower existing mortgage rates resulted in a significant downturn, particularly to transaction volumes. In 2022, U.S. existing home sales declined 18% compared to 2021, although the average home price still rose 10%. In Q4 alone, home sale volume in the U.S. decreased 36% year-over-year, albeit with moderate price declines. Despite the residential real estate market headwinds, we are optimistic that we have witnessed the bottom in Q4, given the strength in what we have witnessed so far in this quarter. Our growth remains strong and we continue to accelerate our market share gain.