By Andy Dean Photography @

Due to increased risk in the market for houses, Redfin has become the latest real estate company to abandon its home-flipping business. Will Parker reports in The Wall Street Journal:

Real-estate company Redfin Corp. laid off 13% of its staff on Wednesday and closed its home-flipping unit, saying the operation was both too expensive and too risky to continue.

The Seattle-based company, which operates a real-estate brokerage and home-listings website, said the decisions were made because it is predicting that the real-estate market is going to be smaller next year and its home-flipping business is losing money. It previously laid off 8% of its workforce in June of this year.

The closure of Redfin’s home-flipping business, RedfinNow, follows Opendoor Technologies Inc. posting record losses last week. The biggest home-flipping company sold too many homes for less than their purchase price. Opendoor blamed the pace of rising interest rates for throttling the housing market faster than the company could predict.

Opendoor and RedfinNow are two large names within a small contingent of tech-powered real-estate businesses known as iBuyers, or companies that use algorithms to price homes for purchase, make quick renovations, and then resell them within a few months. Redfin started testing iBuying five years ago to offer home sellers a faster way to sell and to expand its listing share.

In a Wednesday morning email to staff, Redfin’s chief executive, Glenn Kelman, cited difficulties with the changing housing market that echoed comments made by Zillow Group Inc. last year when it decided to close its home-flipping outfit.

“iBuying is a staggering amount of money and risk for a now-uncertain benefit,” Mr. Kelman wrote. “We’ve tied up hundreds of millions of dollars in houses that you yourself wouldn’t want to own right now.”

Read more here.