Key Highlights
- Redfin CEO believes COVID market to become hotter when/if there more inventory
- Redfin’s Kelman – “There aren’t enough homes for people to buy.”
- Kelman – COVID market driven by demand from owner-occupants
Glenn Kelman, CEO of the online brokerage Redfin, could not be a stronger supporter of the current pandemic-driven housing market. Talking on CNBC’s “Closing Bell program, Kelman said he believes this frenetic housing market could well become more frenetic with more inventory and that this market will maintain its “hotness” through 2021.
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This COVID housing market has been a bright star in the US economy despite the tremendous damage the pandemic has caused in other areas and sectors. Just compare the commercial real estate market where sales and price growth have dramatically pummeled to levels not seen in a decade or more to the dazzling sales and price growth in residential properties this year.
Just take a look at Redfin’s revenue growth in just the first nine months of this year if you’d like to see how bright a star housing has been to the overall economy. Redfin’s total revenue has soared +17.4% and, since Wall Street jumped under the couch in March, its stock price has skyrocketed +400%.
Kelman said, “Every week I think (the housing market) can’t get crazier, it gets crazier.” Kelman did acknowledge that this hotter than hot housing market can’t last forever but, with more inventory, “…we think it can last through 2021.”
Kelman thinks that, particularly with the coming availability of the COVID-19 vaccine, “If we see people get more comfortable letting others into their home, we’re going to see more inventory on the market, and that’s what will drive sales volume.”
This pandemic-driven housing market, according to Kelman, is different that the mortgage bubble market of the 2000s that was driven by speculation and predatory lending. “What’s driving this boom is true demand, that people want to live elsewhere…”
Remote work has given housing consumers geographic flexibility and the technology driven freedom to choose where to live. “(This housing market) is driven by a true change in consumer behavior, where people want to go to Montana or, at least, Sacramento or Tucson rather than living in the major urban centers.”
Thanks to Redfin and CNBC.
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