Earnings call transcript Q3 2022

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Operator

Good evening. Thank you for attending today's Offerpad Third Quarter 2022 Earnings Call. My name is Megan, and I will be your moderator today.

I'll now turn the call over to Stefanie Layton, Vice President of Investor Relations and ESG at Offerpad. Stefanie?

Stefanie Layton

afternoon, good and you, everyone. Thank Solutions Welcome XXXX Call. Quarter to Offerpad Earnings Third

Officer, and and here me Chairman Chief Brian Burnett with Our Executive today. are Michael Bair, Officer, Chief Financial

today, Reform Act XXXX. as call During forward-looking of will Private Litigation the statements the Securities defined management in make

expectations. Forward-looking are management's and differ significantly events statements could uncertain from inherently

required as non-GAAP Offerpad Please statements, discussed refer measures. items events, business and will measures. financial and in These not filings today's result refer whether our otherwise. uncertainties, management Commission. heading described certain exclude forward-looking update US in Exchange relating or a future our Securities law, of factors new to other call, the by financial Except metrics or to intend as earnings information, to release with non-GAAP certain the does On risks, company's to under applicable the alter the

earnings the available of of the reconciliations measures GAAP The are quarter on non-GAAP comparable Offerpad's financial tables the to release Offerpad’s in measures third website.

the turn Brian. call to now I'll over

Brian Bair

Thanks, us fourth XXXX company today. our for Michael quarter appreciate share remainder updates and operational results of I'll you our the and will joining Stefanie. market trends, some the highlights, third cover quarter year. I expectations. financial our Hey everyone. focus

grew XXX we or the listing homes, days, to and sale earned kept timing XX% In below our quarter, maintained X% XXX% from year-over-year. a third satisfaction XXX days buyer XXX inventory average an home and rating or acquisition closings aged by customer over

and our offer the to flexibility accomplishments speak macro and the value third conditions real products model quarter, our the estate these homeowners. in Given market to of really the

shock. in Since market the inflation, quarter, sentiment the economy mortgage then, a credit less financial in of The what's estate estate conflict And consumers temporary rates we to market real residential in put second persistent the on of the global real markets [indiscernible], escalation shared significantly. impact consumer and and the and changed increasingly have state increases further edge. has substantial the softening In downstream here.

going has take but we of more buyers' even most stronger listing Since or the can market, attractive. in US in days, value [ph] it's XXXX, homes if is about for proposition underwrite the and sellers when pending ibuying and are the from enormous months, yet. experienced seller's the smart growth, aren't go market, we launch to weeks we to market, provide is how the becomes but even an we And in opportunity there there the

iBuyers. the are buyers' vastly are Right expectations now, to between still a parties home the seller's is and and worth we two what different. including buyers are in market market is it between Sellers the holding phase on willing market, months ether those the the prices. to entire in for real six aren't and estate This most ago between period at challenging engage was

Offerpad control. has I'd discuss more diverse suite Because how core Offerpad’s have listing strategy certainty for continued is like than now. at comprehensive solutions our today navigating product planned service, time. of provide asset-light a include more real to estate we of right offerings, this our and ever customers providing and to important are

addition, to innovating mitigate help are homeowners facing. that In we of the many are create new continuously products challenges can

properties is present. to the inventory addition competing on sell For example, in homes of scope to renovations to when increasing certain our first position

the mortgage. in match into started be cost can options own We countertops our a and that market. upgrades testing paint, move-in My are service Phoenix can select renovation With of of My also customizable before recently appliances our list style. Update they their Way, the be rolled Way personal new offering called will flooring, from homeowners completed services. We and

to provide offering efficiency and breadth an streamlined we This asset a our important convenient with differentiator aligns grow. key The a customers as mission more and team is renovations homeownership perfectly of and our experience. with

On the the as evolves. adjust continue we to market side, operation

holding prices. risk, our account increased for and times to depreciating we underwriting Specifically, updated extended

In the can fact, by the was homes first half the between distinct at difference to second sheet. looking year underwritten home I tell closing that so day is a the in underwritten summary half the of just our compared

FLEX In new parameters, revised Instead quarter, conditions, quarter in with the to of the we market service. the to offering helping homes the also continue customers customers financial cap away Offerpad markets listing service we been allowed turning during purchase select our all listing we Leading outside by risk company. Box has current our while have the markets. price third Buy second our applying implemented to to through the lowering

working one cleaning and home show save continue free advance. a local, to landscaping ready bundling services, Also, agents licensed our services including mortgage. a of customers with to sale, improvement Customers Offerpad can purchase addition by home home and in receive

buying to XX% and listing second third volume the in transaction service has of XXXX. of quarter XXXX FLEX quarter our Our of X% our the in of grown volume from transaction

service margin long-term target. a to supporting Offerpad will renovations margin to With the department important mitigation tool with risk profile and we conditions. the provides ability asset-light our through year-to-date, be our gross expect product The grow gross our service XX% an as market navigate ability changing flexibility to to listing differentiator of our along continue use listing

opportunity. XX across mitigation risk in another the provides markets presence country Our

rapid Phoenix, significant Las a like still and are experiencing Vegas Denver markets While pullback. and

acquisition We into more relying strategically are in see experts, markets and starting some higher are maintaining better local more stabilization approach line we to with on volatility. more capital sight affordable in By our our of stability signs of deploying locations a with markets. the conservative of while

last that third mitigation comes today years, XXXX, markets. have of accounted risk in historical only revenue. of market than over business. seven market from accounted This no clear XX% and the operating strategic intentionally benefit of XXXX, resiliency our XX% revenue. were our more the for our market the for context, diversification. At the largest thoughtfully In in quarter and provide our highlights To time, established some been has supporting we that we diversification four The

to the internal to Offerpad the made adapts. size Lastly, our we the others, and to of managing our reflect disciplined continue approach many we With change, a an current market. conservative conditions of Like adjustment to demonstrate expenses. state recently team

We we continue some responsible over but made and to as difficult quarter will market the evolves. adjust have last decisions the

the past years like historical to current simplified isn't $X Given is in confirms expect industry the Revolutionizing likely macroeconomic services environment, a of market transition estate a do we yet there will in extend duration have periods. especially trillion seven over the the way. the the easy, times today, better real consumer we introduced volatility beyond market

the potential reasons can we encompassing by more to future value we and expect Offerpad of people more are add to services value and come The brand first. why Offerpad more

than are We buyer. just more a

partner and deep serve customers. using expertise estate are We our a real to technology estate real

firmly real future major technology-enabled solutions only estate. early its simplify I is the believe players. iBuying upside two experience of industry in is days that in The homeownership define The the will with tremendous. potential

becomes for the harder sellers the for sell service, from As points to we solution. more traditional and pain will model homeowners it looking an easier be

Being could strong to soon what expect opportunity will one amplify market significantly we largest the of grow. homebuyers our buyer's be a and country's

listing positioned offers, team, Offerpad real with I a excel. cash well a As believe to solution mortgage leading services, is center estate and renovation

note, I'll over the to On that Mike. call turn

Michael Burnett

demand Thanks, real issues business the in further our rapid in the housing, disciplined quarter. residential challenging execution strategy. estate, third elevated and we Brian. of continue prices Despite driven interest some the home rise from in dramatic extended of the by conditions significant in resulting drop for The most affordability was rates

the these we of at the continuation acquired year in on conditions, expected inventory before the Given existing keenly the are selling best price. in the housing half disruption first of our that available the was focused market

estate with individual analytics thousands markets real-time of of years do real utilizing and experience to our transactions We our are that. market data, in

uncertain making the are a with the tough circumstances. for best given We aiming decisions in commitment to times outcome

on Right effectively. may homes now accepting losses short term, to we able often believe capital conserve that that redeploy in the more that to further or be decline means

significantly the homes market-by-market to reduced on time, of are making home-by-home are we these decisions of transition. but number the At and this the we period during basis We have same a acquiring optimize temporarily outcome.

mortgage narrow adjust in market. Box the seeing rates and positive after change more underwritten At sold times be this model us are This in acquired fewer is this sample homes, underwriting our point our the in Though the we return that were will the at to that we in conservative. generate time, we have in considerable variables results and October. that size homes market of homes input acquiring evaluating from we but dislocation, homes that small tangible limit feel are the Buy in September to acquiring results

the on by the QX in the the from strategy for process QX sales quarter from be be decreasing would a proportion through older of of to completed first position end essentially selling acquired into We to growth year believe of This this of first us capitalize and with should half our QX. the expected in is market. inventory what buyer's profitable well inventory

market over margin that X% annual margin to to contribution and expect after an of once X% continue interest stabilizes We to the term. the increase longer

to $XXX and a our sales a year-over-year supported of top the X,XXX guidance average and of XX% the $XXX,XXX revenue, the to quarter, our quarter was QX by range an we the This homes, generated exceeding of XX% in sale year-over-year. now compared XXXX. $XXX,XXX, end third million results. of of Turning In price QX increase increase reflecting third increase

have million $X,XXX loss adjusted a $XX.X charge, million. and million. a these a Contribution We after have $XX.X of of reported interest of $XX.X $X.X per been third charge. each million, Absent inventory negative amounts would negative which $XX this the quarter adjusted million including was million been quarter for metrics Each of impairment negative would of EBITDA these gross home. margin higher, EBITDA, profit $XX.X include net

seen selling inventory age quarter on third in focus our minimizing can our be Our existing properties results. and

This were primary of XX inventory XX% our in temporary XX on at focus at inventory or inventory in over than during dispositions of homes, decrease of summer XXX below planned as is from and decrease acquisitions price our of homes inventory more was June September reduction our a half our Importantly, time and dislocation. X,XXX, result X% which our nearly aged The of September in was the under XX% contract. number this peak. total XXX days XX,

sequential acquisitions acquired year. be quarter reduction X,XXX again of third of outlook, acquisitions our less fourth our given what in the XX% a this we acquisition And than Our from that QX. we represents half expect the in QX would current homes quarter

to target. our to consecutive to time second below the cash time quarter quarter This increased marks with cash Our XX the in from XXX-day quarter. third XX days in the days ninth

expect conditions. do market be of slower we periods target during to However, above this

balancing also that management our cost our activity this operations a a transactional we the taking for expectation environment, standpoint, of From with size in temporary are appropriately being to us. given but slowdown approach current responsible

As the quarter reduced a the result, we in of our third quarter expenses XXXX. second XX% by to operating compared

reductions in overall and an This in on addition to cost sales and marketing headcount reduction. reflects emphasis

Lastly, $XXX million. with of with balance efficiency, on cost we the focus management risk and at a ended cash the XX quarter September continued

quarter, Looking forward, X,XXX of in between generating million million. the homes, X,XXX and to $XXX revenue fourth sell we expect and between $XXX

negative adjusted also EBITDA the to negative and variability reflecting $XX million, near-term expect continued between We be market conditions. $XX in million

be begin. generate year, QX, therefore, the XXXX, homes the up the margins of in adjusted to and sold in this in sequential quarter half ROI. make higher homes we the By further of acquired second likely that expected During were improvement QX expect majority sequentially of and initial would, to would EBITDA

we capitalize in next wave know settle. and While of positioning macro now, on will things that is real that the we uncertain, current temporary opportunities. to environment Right are state market do estate the the company are many the the

strategy a a renovations As value center value-additive high long-term has to customers proven approach with offer and to the that buyer structure and first the and shareholders. offering, highly both and efficient profitability, deliver holistic solution

products the foundation. navigate have allowing continuously platform, operations mature to stable Our over and current established us the and years, dislocation through improved an with

higher-margin, while focused capital-light expanding offerings portfolio, improve on growth emphasizing and the the products reigniting balance meeting in XXXX. into challenges, executing of further through to We are the and our

call to operator question-and-answer the turn to over the the session. now I'll begin

Operator

you. Thank the comes Instructions] of from [Operator Dae question Lee line Our Morgan Chase. with first JP

open. now is Your line

Dae Lee

Great. about Question Thanks for the two. taking question.

operate about the one, you first you some stability On that markets talked in in. gain

behavior those think some driving see from do to you are you kind markets your that? of similar sell? mix are – along those the homes seeing over taking you over you your home secondly, in how that plate more the deteriorated wasn't the and far other And home And that's to reasons to then longer are guys towards So, it how take of – markets shift remain market the it are seems long --- in And as home the conditions selling is stability? a expecting sold for what of right? like on that that to

Brian Bair

it's that affordability. has market We're Dae, as conditions markets. far the we're to primarily of a as Hey, that lot Yeah, with seeing, Yeah. Brian. that the seeing the specifically, in do Midwest

those I the saw as home other you think you markets Indianapolis, some where price Fort Columbus, Wayne, appreciation of Ohio, have markets. the in didn't

So I think is that. a driving affordability lot

still in have those supply less than half month You month homes and markets well. – as of

we've seen. where that's So

as, see of the other bit. to settle a far when we're kind As going little markets

to price home be due markets like the going in Denver, Phoenix think I and pretty we of until places that to the and some volatile affordability. saw it's high especially of end year, appreciation really the

But you're other going we're markets home closely. and there's do immediate lot spots there's that we're on. a But we're to see think obviously, with seasonality. seeing. is that the increased of what focused watching it has price I in an – But to affordability

Michael Burnett

Mike. Dae, Hey, it's

terms sell QX through question tell there you, think the there I in the our in in second What we is your continue I'd expectation. Just those generally will homes fourth inventory. and to speaking, of quarter that is on

pacing we're our that anticipating in of market acquired current this of anything, the are quarter, pre on inventory, call be July that that older year. it, we seeing predominantly and We should through through what based up by end first the

from guidance of results the in we for in be vintage. the sell So because QX, of more the negative will that some homes that driving there that's

As be But, what still right working see expectation. into our can shift we'll that time. to the weighting you on that think of point homes, need based we through start I move that's QX, some see in that now, but at to to we newer

Brian Bair

-- add that remember trailing. just One data is, I'll Yes. other real the thing is to a of Dae, estate, what's in lot

happen for or to is XX XX it to And chose home so from we will we put that if underwritten a underwrite what get we then underwrote get home it through And market. example, in have some the originally. side, house, on on and the renovation, days the close when the

that stuff -- for market are are we working where hard that what right us this see how underwrote I there to in that remarks when we the to that's starting are signs part. And was home that performing. properties market underwriting that we're it's So, of Those really now. -- complete that important homes seeing, good see, we're conditions those but mentioned legacy my It's more different is before, the and most that current conditions. that -- are of through their

Dae Lee

or do homes of follow-up. that guess, quick biggest homes be Is a second key I a the you're seeing on order sold? your, said, of as on quarter sold? fast written being And Just those to getting number see the smaller being we

Michael Burnett

that is will of the in those fourth come through bulk quarter. expectation -- is the that the majority Yes, the

Operator

Thank you.

Ryan question Tomasello comes with Stifel. from Our next

Your open. is line now

Ryan Tomasello

that required to the the decline taking business value partners, quarter you the financing to how thinking in scale conversations covenants. questions. protecting And on the about first financing the maintain and the that talk into guess, going correction with your you're will this about capacity financial book the pressure for base we're how market year. about your beyond I overall, of exist you the this you end question through. Thank feel capital I presumably Can this guess considering

Michael Burnett

We've are banks partners your do a in doubt your and need Ryan, be and it's financial you these we Hey, Without communication that periods regular when now, Yes. regularly. with to in group side good and and team got We've finance the relationships good very got up treasury over the capital great here. group built a equation. a of the working on Mike. debt

in we're close them. So, we with contact

our We're with they're try to good proactive visibility, communications them give them in our success. to because collective critical and

that line the short sure of just $XXX we covenants. all our quarter in by there is make the ended cash. in We terms It with abiding at to those. those that and we're million we with with compliance are something conditions So look in and

The the to we first is through the and year too, other end now quarter. the thing that into as go of consider, and

balances of debt prepared in remarks the with our as and slowing slowing talked will coming inventory about buying. intentionally temporarily Our be down we pace

come part outstanding well. those so, And amounts down, that parcel and as to

So again, them gone to years, we've something partnerships very in had them, for past they've been the we've some as these and along critical with the in terms instances, four but of company. supporters we've of added good relationships

Ryan Tomasello

think And inventory you're on some forecast? for all gross then you the provide alluded we then to work in margins speeding about into and color, color OpEx XQ, Great. what into of And the the you Thanks around guidance as workforce XXXX? how can the some -- that that, there. for beyond Mike. you should the baking on through a some then side, And recovery reductions contribution

can you we the split define run you and OpEx how to however thinking should the of out efficiencies, system rate maybe cost If be those OpEx. you of that amount explain prefer about following

you quarter-over-quarter? mentioned XX% reduction about think I

Brian Bair

Yes.

A Okay. there. lot

So come But that guide first, our if particular back over the taking into aimed contribution in at account but to home. don't of a margin. me, specifically contribution margin that. anything, We of mind really to total is calculation cost on bear skip I ownership

not and period. so And particular we're the aggregating cost a go calculation, even in that that it's if in come

contribution terms coming that the with going to believe is in said, recovery. then back of bottom be we trough margin probably of So being QX that QX up

under rebuild we different can And we recovery as in just of your just earlier, then can of on we're say. at to that's ones, XXXX, through in all moved we frame to if mean, comfortable under tough get the said where we areas -- that terms I to objective. call the ideally, doing conditions. question a in the where different that, buying legacy back On different give the this on time sorts point. at really selves for points position begin inventory in tough is and The run

structure. process through reduction year we of in we X%. workforce the terms pausing we go were the belt measures on the year in cost September about a the that in had that In earlier was -- in put We where did reducing in force, earlier tightening place our the had in resulted hiring by

over peak just business, we're so employment to the pauses from that we'll attrition from here. about And due natural the year actually hiring and in that of peak our XX% actually end down we're summer with the continue and time, the through

that annualize I can So that in would XXXX quarter's and about year, $X expect that, million a this next a for that's year. about you then benefit worth for

Michael Burnett

cycle Hey, to unique What add about the the is again. I'll time, surprise, coming think market of third quarter, quarter last to the was the it back changing, that Brian. just third said One kind thing was was speed. a this I I is that

the the through was there And homes quarter where qualified lot certain what quarter, is and fourth rates to third pause so moving we you're these the a mortgage it for of a as that see saw were in increased. thought amount that's who buyers more more a they going as

in basically a and the there, And ability kind move so there a affordable there of affordable. was system was shock to was their buyers what was and logjam of

that there. a happened shock was there kind So of status

and through little moving that starting to We're see And homes our I this. weekly bit. we're settle mentioned, looking we're certain-- a at like

what conditions. happy we've been in we've team the moving been through at we've these through -- been moving pace feels right so and that inventory but inventory obviously at what with And slow, -- now. actually and doing I'm the so a

Operator

Thank you.

JMP. question Nick from next Our with comes Jones

is now line open. Your

Nick Jones

questions. Great. Thank the for you taking

you're affordability than -- of How last starting of expectation long Do that mentioned see point what on of that a home -- for do You volatility kind able need transition. it? in confidence of buyers. on spreads you will call and bought be of put a then in kind an to kind the have and you tighten that? I the to thinking and are about a go, kind earlier be of Thanks. might are you of there'll when that's kind typical finer or longer peak to how kind kind we Can where follow-up. just rates then then And more how

Brian Bair

happened, up, on whether price because buy a conditions, that's is is, look what's No, Yeah. depending really -- it the under down consistency we we for whether the that's going volatility, obviously, in -- volatile volatility talk selling we sales term. it's end down. that. really market going when the it's so really any about on of is going of fast kind market can loose it's how market and What is What

it's going market been that in X.X% We or before, down for build in of home, going X%, if certain a certain I've other in. So segment can example, a down a it's month. downturns evolved

this XXXX people been I you see and home. say when height unique, Where volatility XXXX, in to opposite it had problem, no where is the then equity of has because the was was it their

the out And is inconsistent people much seeing basically sellers. could in of to pricing is have and home. through. $XXX,XXX, you're are we're for in so equity happened What there what mortgage to today they seeing of their home, so $XXX,XXX squeeze trying really were a people what's out There go equity so

that HPA closely really watching we're what that's watching so markets in high especially we're the And closely.

in. as we're buyer that is and more far and as mentioned of a little just We're bit, think that to little moving the people where of Midwest is what call the it bit like have kind far equity consistent I start consistent on expecting markets inventory sellers shock what through affordability that what of gets seeing getting amount that kind key. as I more and a seeing So in pricing. obviously, I we're And volatility of some overall, with as be

the least we're it's factor just seeing with underwriting, that looking on just for of we'll an I and we're the think consistency. anticipating the happens year, Revere, depending important what consistency but what So at I'm in more fed is next the start which to most first start we're part seeing

Nick Jones

benefit helpful. said sounds then, on freezing That's cuts you you touch And cash the million Mike, we you longer? to cash into that heading bit year the could do about maybe a to cost kind for. about kind next kind it. of spoke should Thanks. next macro position about environment there's year challenged $X look feel how position? I you like How the of extent know the some Got hiring. of It stays

Michael Burnett

it's Nick, next Yeah. manage run in absolutely for quarter position to always of organization. a these as We I'll ended we'll through conscious. the company But some very quarter. very we the we we But hallmark something that losses -- continue efficient it's a That's We've in the there. the in good of lean, past cost very obviously, that. work do and we to years. run you, been closely. the just We've been tell six been have how

that is to something manage We'll on obviously appropriately. the our it's high So continue radar. monitor and business it

Brian Bair

Flex, focused buy but on, The being and well. able inventory, of example, more but we're working buying hyper also not our homes homes, to partnerships sell now, that. asset-light current just thing from SFR us products. our some of and those just our disposition I'll obviously, to that Right also add as they'll for and our one with

I that we're gives provide we and on the leverage also products And volatility, for a asset out volatility I solutions it during being it well. And us again, but that we in different on not side just more the consumer, of way the center, solution can to call, that through I'll the last make times it mentioned, think it focus it's the we can what consumers roll highlight we to of being to as as also from smart say, so approaching continue light -- the as

Operator

Ages Berenberg. Thank Justin you. next question comes with from

now open. is line Your

Justin Ages

thanks taking question. the Hi, for

First, on differentiator. it's a key do the renovation, think I

making you disclosed been cost a more? though you've renovations, getting think been, up I it's more cost from sold about of it's impediment an that house's have to attractive, more XX,XXX historically homes make little has in that to them to is put money where average the which even

Brian Bair

actually It's the Okay. opposite. just

your more more that we're for So, new for it conscious what and of that's own of we're as the the increasing once demand how is when through amount you you But -- by we're and we underwriting renovations supply we normal home, you inventory what to make home want underwriting doing definitely money maximizing through needed times, renovation. that can being want the we're the and we fee is have, about any renovations your -- we're needed intentionally home. -- service price

In times is you want to like that want other what the do sure you make home before this, sells homes. your to

And and able things and homes granite like make homes renovation to upgrades unique prepared first add use to been different team are the our markets to appliances so we've our sell different and to a to that good in going are make our product. sure

intentionally we're So, doing that.

it's because leading of With the bit longer the little some market. the it worth ability its renovation time to they're of but much -- times, our very renovation, of not those are a things reducing

right that's focus. but our -- been now So,

renovation have efficiency, control And the and timing, market because to there's going a is that this we your the point we transition, mentioned, earlier demand, mentioned when last the of is your and for able the from six just supply I years everything to want being to be of to hope again really important, sell first. your your cost, just renovations, that and to importance

Justin Ages

you're has other then introduction October? Way, think considering helpful. has All expanding it That's to response of well-received And enough Thank also good? along Phoenix? outside said that of in it you. My you been this right. markets you introduced those lines Thank been with the you. I And

Brian Bair

Yes.

The is about So, -- right say market. because this early while. really buyer's I I product. now. buyer's would now timing product for we've a a the My been a it's There's is like really key working Way It's two What things. it's on timing

market renovate we're that My we're So, an in Offerpad do sometimes, there's home, wants preference the what going personal a choosing through But is the just in and renovate. able we're their what as of so house we to Way. to at house have before someone is to

next phase the of phase -- products. of outside is that, use secondary that for just the phase is But the Offerpad that we is it product. But will be first of Offerpad

a kind the where The So, a want of one customers' representing and to a teams it's just paper response and our of very of able are have. on we optimize that we're buyer -- bullish very, non-Offerpad product house Flex that so will early am going. is indicator But I an that they be home.

They a like new finishes you ability the house the would on to love choose home. a in

in are in out my early very focused get other really for So is it's great our quickly of out to a lot to that plan hyper markets. it's rolling markets. that on but very, they But our like that. timing be as we other buyers going But rolled

Operator

Thank you.

question comes of from the Brett next Fitzgerald. Knoblauch Cantor Our line with

Your is open. line now

Brett Knoblauch

the if for price guys. my up, should decline is guess it, at home basis go accelerate. call Hi I rates end to XXX continued of theoretically points anything, pace Thanks September question taking have time. of the

I what currently now, with you older fully the you're guess face gives when you purchasing prices to to same in facing homes normal homes that have you're pre-July. won't vintage that the levels, confidence the call yet had adjust issues

Michael Burnett

specific on obviously I with your that. overall agree extremely market Yes. doing. very overall We're what we're And of focused its take.

are and more the expecting with buy expecting markets, markets. we're the markets, depreciating are we we're Vegas, to Denver, we like a So those that in the volatile most Phoenix place in that extremely where -- it still those those decline going in markets, being careful prices in and volume good those markets that you're see

the like month underwriting can very the a Midwest, there, see. with before, Indies markets But margins. some areas and wide per and those decelerator mentioned the like I we're So of up in

we're You're other you're we're homes those seeing in in impact not markets. nearly -- these of getting buying markets, more the some seeing the that

Raleigh even Charlotte and And places so, areas. are like

that underwriting is, that some And one prevent with we so, we did older our new our inventory. we how conditions we're with that remember, did other -- of

be performing we're what's markets I is that, so assumptions, -- markets what the like more a of with signs early wider we purchase price that worthwhile are lot in with underwriting is that, that margins, home underwrite it of So to knowing when not more these and well. especially said, going

doing of their broadly -- the use to we're we'll people pushing a where having market we're in. inventory we're and our just more markets help in FLEX, that thing The them. to that, that not, other for home wanting more We're lot them buy quite

helps We'll of with the us But the uncertainty even that's work on in market, their but add them because going and renovation anything the them that the market. upgrades helps selling open to home. home and buy, that to not just in to we're

are the just think and that this more getting the around specifically the hardest. the add, you're hit are I'll seeing the other parts outline I just most areas for in country, the is areas what thing areas

And the or seeing decline, so, depreciation prices at outside home much those higher XX minutes in you're main places metros. XX, more the of

buying so also, then And to new market, sensitive we're that. doing very and about what very So next anything then -- are homebuilders, pricing those and they're -- in on they're there. anything any with aggressive their

buying So a right it product people -- of very being now. pushing company. single-family moving what and more And/or now FLEX to we're we're to right the rental selective just it buying and

Brett Knoblauch

makes that just And forward? comment, impairment, or going to it, then a That we that million how we should Perfect. expect sense. inventory another, should maybe think moderate, $XX.X about call

Brian Bair

Real that's process Chief folks down end way the our each do regional So always to of the head have existing tough all local marketplaces. we run through a up at through Estate And from to operations that prediction our we What inventory. a we very the our Officer. back of each quarter standpoint. that We a go is our one involve thorough

thorough And point we neighborhood, to that that in them the time. market process mark a specifically, so, at it's the and homes, basically the markets, considers

balance The below we're expected now. be is to where at inventory

go here at lesser that sitting little as take, start it's impact an So I would of to And, but the point. see down I we markdowns would we the today, you impossible this expect and we tell a between along. settle candidly, to market that bit, predict hopefully,

Operator

you. Thank

from Our next question comes with Jay Wedbush. McCanless

now is line Your open.

Jay McCanless

else factors all end? of afternoon. getting to between Good I the the guidance from sales quarter. had, you What are what guess, guess, first the Hey. rate, my you is the one bottom top the equals out that versus I Thanks keep some for end fourth the would end home questions. there top assuming have difference taking the for I

Brian Bair

the characteristics in and an -- first I really are the cause the prospects. demand where. affordability it's What been of markets. slow standpoint, just each from going to foremost, root demand think, down be really that's to of the And

from is fourth we that thing quarter other The sites our too, have usually the the most in standpoint is a seasonality pronounced.

And like there environment so I'd how say typical is seasonality some uncertainty in comes an play into there. this.

what a of to last we to variability. bit of put range try similar to And so account a that we've quarter did for some that's wider little why

Brian Bair

nice right going happening we're most to some some the in of right I is now now, markets was seeing are the volatile say -- things of the just one that moves not of happening. upgrade transactions their or reason. their that's coming people not kitchen of wants majority from home to move to the lifestyle them The need for who or whatever are just

the the volatility so, as transactions well, And let right?

and is volume just Mike's point. that transaction we're the So mark seeing question to

of the So of that we're anything that buyer closely watching that course, in because demand buy. leads we

acquire, anything want it sure XXX also, to into So, within not to then make it it and and and able going buy days Flex. sell we if we sell push we're that to renovate that

Jay McCanless

looking And then type any right stabilized, are rates to mortgage some or now of at you new put you hold plans assuming markets possibly on have point? that still enter expansion

Brian Bair

– really something have then have again open bias been secondly, model, pace next X our we we've of it now, years markets we play to X have larger the say of towards geared about -- probably of still be And to year. year, It sites markets. and We I Yes. open type year adding that hub of markets. more needs more would couple is we would a to on up still second then up we're also that going can by the in in more the right to towards last can but satellite we half first. our new

is, of how would and looks the now, some bias the position a And half say to markets of given have adjacent circumstances, out, or satellite so the year I the see then right we’ll of push first our first. a little more bit

Operator

Question-and-answer concluded. closing call remarks. you. turn for Blair, will the over Brian question Thank and now I CEO Chairman has to

Brian Bair

maturing over created will is proud Thing never momentum last most real I'm estate the be the we've of years, seven same. that

even more the strongly being part people. $X today trillion We around our be revolutionize realistic I'm to world and are of mission excited us, Thank in about our the joining all I a today. for but industry. us believe you can solution that

Operator

Thank participation. That your for concludes Earnings Third Call. Quarter the XXX Offerpad you

You lines. disconnect may now your

Offerpad Solutions (OPAD) 2 Nov 222022 Q3 Earnings call transcript