Kirkland-based HouseValues lays off 60, shakes up executive team

HouseValues, based in Kirkland, is eliminating 12 percent of its work force and restructuring its executive team to try to strengthen its core real-estate-services business.

The slowing residential real-estate market was cited as the cause in a memo Chief Executive Ian Morris sent to employees Wednesday.

"We built our work force based on a larger business than we ended the year with," Morris wrote. "We have, therefore, taken the very difficult and painful step today of reducing staff by 60 people from our Kirkland office."

HouseValues was founded in 1999 on the then-innovative concept of providing homeowners who contacted its Web site with a free property valuation made by a real-estate agent.

The company initially made its money from agents, who paid to be put in touch with homeowners. Some 16,000 agents were using its service by last fall, Morris said.

Buoyed by its early success, HouseValues grew to provide a similar lead-generation service to mortgage providers. It is closing this portion of the business.

"This was a difficult decision as we have done some very good work here, but doing so will enable us to put the full focus of our organization on the success of our real-estate-agent customers," Morris said.

HouseValues is facing stiff competition from other Web-based businesses — particularly Seattle-based, which also provides free home valuations but does not require that homeowners be contacted real-estate professionals to get those valuations.

However, Morris cited the cooling real-estate market, more than competition, as the reason for the layoffs.

"Signing up new [agents] is harder when we're providing them with leads and other services, and it takes longer for them to become transactions," he said.

Several other changes were announced Wednesday.

Among them, Barry Allen, former chief financial officer of the online real-estate venture, was named CFO and executive vice president of operations. And the position of chief operating officer was eliminated. Clayton Lewis, who held that post, has left the company.

The company, which also has a Yakima office, is listed on the Nasdaq under the ticker SOLD. It closed Wednesday at $5.24, up 0.08 percent.

Elizabeth Rhodes: