Soham Bhonsle: Okay, perfect. Thank you so much.
Operator: Thank you. We’ll take our next question from Peter Abramowitz with Jefferies. Please go ahead.
Peter Abramowitz: Thank you. Yes, so I just want to go back to some comments. I think you said total listings were up year-over-year versus the first quarter of ‘23. So I just want to unpack that. Does that kind of imply that even though total listings were up, your transaction volume still down pretty significantly? Does that just imply that total like, kind of, decision making from buyers and sellers is happening a little bit more slowly? I just want to kind of get a little more context and understanding of the dynamic there?
Howard Lorber: Yes, I think that the listings may be up, but what happens is that the buyers, you have sort of a lack of buyers because someone that’s going to buy today generally has something to sell. So they’re stuck, it’s a quandary because they can buy something and pay a higher rate. And then what they’re going to sell probably has a lower rate on it, because they’ve owned it for a while. And that sort of puts a damper on their thinking and the process of whether they should move or not move.
Bryant Kirkland: And we are more immune to that pressure than some of our competitors, because we have such a high percentage of ourselves are ultra lottery and cash. However, what I think you’re seeing is with the 25% increase in the fourth quarter and the 7% increase in the first quarter, you’re now starting to see the markets are loosening up. People didn’t have to do anything for two years after 2021 when mortgage rates were at historical lows and then went to generational highs as we know. Now we’re seeing people have reasons to move and they’re going to list their homes and that’s going to create more volume for us in the future. Our average sales price continues to be very strong at almost $1.6 million per home. So we have a lot of competitive advantages in this area.
Peter Abramowitz: Okay, that’s helpful. Do you have a breakdown of what percentage of the buyers within transactions that you’re involved in? Are all cash versus using financing?
Bryant Kirkland: That’s more difficult to say because many times people will make a cash offer and actually use financing when interest rates are low. But in New York, it’s clearly still a significant percentage and also in the ultra-lottery in Florida, because you have just a different character of buyer.
Howard Lorber: Yes, in these markets, in the high-end markets, you don’t have people making offers subject to mortgage contingencies. Because the seller doesn’t want to see that, doesn’t want to hear about that, okay? Because that’s troublesome. So we really don’t have an idea. And I agree with what BK is saying, is that many people just don’t just say make an all cash offer, but then they’re financing it outside of that.
Bryant Kirkland: Right.
Peter Abramowitz: Got it. And then last one for me I know you’re still working on some of these kind of operational improvements and improving the cost structure. I guess just trying to think about the timing and trajectory of when you can kind of get the brokerage segment back to breakeven positive territory from an EBITDA perspective? Is it kind of a trajectory of rates? Is it an absolute level of transaction volume that you need to see? And I guess just any comments around possible timing of when you expect that to happen?
Howard Lorber: Well, look, the quicker rates go down is going to really prove what the — how fast it’s going to happen. But we don’t look at it that way, because what if they stay where they are now or go up or go down a drop, that may not be that meaningful. We just have to focus on getting the business to make money for the shareholders and not wait and worry about where the volume is at any particular point. So I think that, that’s what we’re really, it’s really much more of a — it’s not guesswork, but because one way or another, it’s going to happen. But we want to keep trimming down the business until we really can’t trim anymore. And we’re starting, we started a new series of cuts and we’re happy about that. And we’re going to continue doing that into the foreseeable future.
Bryant Kirkland: You know, with our strong balance sheet, we do have time to do this right. We’re not going to be under pressure from debt covenants or from historical losses, because of our strong balance sheet, so…
Peter Abramowitz: Right. I guess just one more as a follow-up then to Howard’s comments. I mean, in terms then of what rates mean for transaction volume, say they are stable, but high on an absolute level, do you think that stability would be enough to kind of see the market start to loosen up or do you think rates need to be going down for that to happen?
Howard Lorber: I think people are used to these rates, starting to get used to these rates already and no one really trusts what anyone else says. You know, what would they say, six or seven cuts? They were saying six or seven cuts this year and that was maybe three, four months ago. Now all of a sudden it’s no cuts then someone starts talking about, there may be being one cut. So I don’t think you could run, I know for sure you can’t run, we can’t run our business by worrying about that. We worry about it, we hope that is going to — we’re going to have cuts, but we’re going to try to get ourselves in a position that no matter which way it goes or even if it stays this way for a while, that will be profitable.
Peter Abramowitz: All right. That’s all for me. Thank you.
Bryant Kirkland: Thank you, Peter.
Operator: Thank you. Ladies and gentlemen, those are all the questions that we have for today. Thank you for joining us on Douglas Elliman’s quarterly earnings conference call. We hope you have a good day. This will conclude our call.
