When we’ve done coaching sessions and training sessions on Compass AI with agents, we’ll have thousands of agents in attendance and by far our best attended training sessions that we’ve ever had. And agents rave about it as a huge time saver for them. And it’s also one of those things that gets them over the cold start problem when they’re sitting down to do that. And so, one of the best things about all the investments we’ve made in our technology platform today is it gives a lot of surface area to use AI across. And so Compass AI is the latest example of that that someone, something that we’re continuing to be excited about expanding over time that won’t any incremental investments to do so.
Ryan McKeveny: Great. Thank you very much.
Operator: Our final question comes from the line of Matthew Cost with Morgan Stanley. Please go ahead.
Matthew Cost: Hi, everybody. Thanks for squeezing me in here. I guess, you’ve had a pretty clear roadmap that you’ve laid out for the market that we’re in with your transaction volume is really, really low. Prices have not gone down and you’re managing costs, as much as you can. I think you’ve been clear about your goals there. What happens if we tip into a recession scenario from here? Do you look to cut cost even further, you’ve already taken a lot of cost out of the model? Do you kind of stay on the path that you’re on? And then at what point do you lean back in to reinvesting? Because obviously, if we do end up in that scenario, then that’s kind of the darkest moment before they start to recover. Thank you.
Robert Reffkin: Well, look, I think there’s a lot of – the number of people, that would say that if a recession would be good for the real estate at some levels, a recession at some level would be good for the real estate market, because it would lead to the Fed lowering rates, which would bring down, obviously the mortgage rate. And that’s the biggest thing that’s governing the transaction volume in the country where 60% of homeowners are locked in at 4% mortgage rates or below. And so, rolling something four into eight just too much or three into eight is just too much, right, the way it’s a better number now but it was nine months ago, nine months ago, it was 70% we are watching it for. So it looks like over the last nine months it moved from 70% to 60% that that have that significant rate lock issue.
So, yeah, I think a modest recession would be helpful to the mortgage rate. A deeper one would be more, it could contently be more problematic. And in terms of when we turn the investment back on, I think it’s important to be clear that we believe that this isn’t a temporary moment or to just bring expenses back when the market comes back. This is, we are thinking of this as the new normal for a cost base, of course, increasingly with inflation over time. But we’re even at these levels, we have a technology team that’s over 500 people strong, which is likely larger than every other traditional brokerage firm in the industry combines. Or the value that we create, it’s all relative to our competitors. And I think the distance between us and our competition has widened every year over the last three years.
And so, for that reason, we don’t need to put on massive dollars to invest. We can just continue being the company at these new levels and taking advantage of efficiencies, to be able to earn the right to invest in by creating more profit over time. But I don’t think that’s going to be the area of focus and then creating more investment right now.
Matthew Cost: Okay. Thank you.
Operator: I would now like to turn the call over to Robert Reffkin for closing remarks.
Robert Reffkin: Look, thank you everyone for joining today’s call. So I just want to take these final moments of the call to thank all of the Compass employees and all of the Compass agents for their hard work and commitment to making Compass the number one real estate brokerage by sales volume in the United States for the second year in a row in a difficult, market or even continue to outperform and I just want to say thank you. We continue to successfully manage our expenses down and are prepared for the uncertainty of 2024. Eventually, the real estate market will come back and when it does, I am incredibly confident that Compass is well positioned for incredible success. Thank you everyone. Bye.
Operator: I’d like to thank our speakers for today’s presentation, and thank you all for joining us. This now concludes today’s call and you may now disconnect.
