Countrywide has seen its first operating loss in a decade and a 20 per cent decline in West Midland property sales.
The UK's biggest chain of estate agents, which has offices of Dixons and Bairstow Eve in the West Midlands, saw an larger slump across the whole of the UK, with the average number of house exchanges falling by nearly 30 per cent.
The company's UK estate agency division, which has more than 1,000 branches, made losses of £6.4 million in the first six months of the year, a drop of 129 per cent on the same period a year earlier.
The property downturn also left its mark on Countrywide operations offering financial services and conveyancing as the company announced overall pretax profits of £3.5 million, compared with £30.7 million a year earlier.
Countrywide has 35 Dixons offices and six Bairstow Eve offices across the West Midlands and employs around 275 people.
The group said that number of homeowners in the region selling property with them remained steady - up just one per cent compared to the first six months of 2004.
But, with fewer exchanges, Countrywide said its portfolio of unsold property had increased by more than a third - up 35 per cent.
Sales director for the region Bob Scarff was, however, upbeat and believing the worst was now over.
"I think the housing market has bottomed out. The rise in stock on the market has increased competition and most vendors have realised they need lower prices to attract buyers. While the group's estate agency division made a loss in the first half, I would expect it to make a profit in the second.
"I honestly believe that with the dip in interest rates, we may well see a betterthanexpected bounce-back of sales in the Autumn."
Mr Scarff's sentiments were cautiously echoed by Countrywide chairman Christopher Sporborg. However, Mr Sporborg warned that external events could still influence the stability of the market.
"We remain careful to keep our costs at a level appropriate to the market, whilst continuing to invest for the future," he said.
Countrywide responded to a subdued housing market earlier in the year by closing 33 branches and cutting the average number of employees per branch by eight per cent to just over five.
"We've seen a consolidation of our estate agency network over the last few years," Mr Scarff said.
"We're now concentrating on what we're good at. In the next three to five years I believe there is an opportunity to open two to three new offices in targeted areas around Birmingham."
Group figures were distorted by last October's acquisition of Bradford & Bingley's estate agency offices.
That meant estate agency turnover fell by only six per cent to £117.9 million, as the number of branches increased from 804 in 2004 to 1,072 at the end of June.
The acquired business lifted Countrywide's residential lettings operation, which improved profits by 29 per cent to £2.7 million after managing a portfolio of more than 51,000 properties.