Hot on the heels of Friday’s news that once high-flying Zillow was laying off a quarter of its staff, now fellow Seattle-based real estate startup Redfin has followed suit, laying off 20 percent of its employees.

CEO Glenn Kelman posted the news on the Redfin corporate blog. The reason is straightforward: as the stock market crashed, “prospective down payments, tours and offers (on the site have) dropped 30 percent,” Kelman wrote. “Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.”

The news comes after Redfin reported seemingly good news. Despite the real estate recession, Redfin’s revenues grew nearly 50 percent in the last year with traffic to the Web site jumping more than 300 percent. As recently as just a month ago, the company raised its 2009 revenue projections.

However given the events of recent weeks, “we absolutely have to avoid running out of” money, Kelman wrote in his blog post. Kelman remains optimistic though. “Our market, even if it shrinks to half its recent size, would be $30 billion per year. That means we have plenty of room to grow.”

Kelman concludes with a reality check: “Redfin’s whole business will struggle and fight and may yet fail. But the only way it is possible for us to succeed – and, even today, I believe we will – is if we adapt.

Read the full post here.