In the real estate business, there are signs that things are getting better.
What took place?
S&P Global Market Intelligence says that shares of Redfin (RDFN 19.74%) went up 17.8% last week after CEO Glenn Kelman said some good things about the state of the housing market.
Kelman was right last March when he said that the real estate market for homes was reaching its peak. On Wednesday, he explained in a series of tweets why the housing market seemed to be getting stronger.
Kelman went on to say that a number of signs of buyer demand, like the number of people going on home tours, asking for meetings, and making offers, were still down from their pandemic highs but were much better than they were in November.
Kelman also said that the real estate market is much healthier now than it was during previous downturns. He said that inventory levels are still low compared to the past and that less than 2% of homeowners owe more on their mortgages than their homes are worth. During the 2008 housing crisis, more than 30% of homeowners were underwater on their mortgages.
Kelman said, “The market could still fall at any time. “But the housing market has been better than anyone could have hoped for in January.”
Redfin would do well if the housing market kept getting better. After getting rid of its RedfinNow home-flipping business, which was losing money, the company is now putting all of its attention on its highly regarded real estate brokerage business. If the housing market got better, Redfin would likely sell more homes and make more money, which would be good for the company and its shareholders.
Kelman also said that Redfin’s agents were surprised by how quickly the market changed. In fact, they were surprised so much that they are now telling their clients to make offers faster.