ZipRealty Inc. nearly turned a profit during the second quarter, posting a $225,000 net loss as revenue rose 17 percent from a year ago, to $37.6 million.
The company’s second-quarter results, which it said benefited from the federal homebuyer tax credit, compared to a $2.4 million loss a year ago. But business slowed significantly at the end of the quarter, the company said in revising its outlook for the rest of the year.
Revenue growth is expected to slow to the single digits for the remainder of the year, and ZipRealty expects to post a net loss for 2010 — although not as big as the $12.9 million loss for 2009.
"Housing market momentum and our client activity levels downshifted significantly by the end of the second quarter," the company said in a press release, although a plan to switch California agents to independent contractor status during the third quarter will help minimize impacts to the bottom line.
ZipRealty said it handled 7,100 transaction sides, an 18 percent increase from the same period a year ago, representing buyers nine times out of 10.
The company, which offers commission rebates to buyers and discounted listing fees for sellers, said average net revenue per transaction was down nearly 3 percent from a year ago, to $5,129.
ZipRealty employed 3,251 agents as of June 30, compared to 3,172 at the same time a year ago.
Although the brokerage opened offices in 10 new markets in 2007, it’s only entered two since then — Hartford, Conn., in 2008 and Portland, Ore., in 2009.
The company said it has 726 agents in the 12 newer markets, compared to 2,525 in 23 previously established markets.
At $5,322, average net revenue per transaction in previously established markets was 20 percent higher than the $4,419 average for new markets.
ZipRealty announced last month that it will convert all of its California agents — representing about 28 percent of the brokerage’s total agents — to independent contractor status.
The brokerage will no longer offer those agents benefits they currently receive, including medical insurance, dental insurance and 401(k) retirement plans.
