what happened
shares of redfin (RDFN 19.74%) Stocks surged 17.8% last week after CEO Glenn Kelman made encouraging comments about the state of the housing market, according to data from S&P Global Market Intelligence.
So what
After correctly warning last March that the residential real estate industry was peaking, Kellman explained in a series of tweets on Wednesday why the housing market appears to be going strong.
1/16: On March 15, 2022, we said house prices had “plateaued” and that “it’s crazy that demand is so strong in the midst of war, market volatility and inflation.” The market he deteriorated every month until November. Currently, the market remains fragile, but we believe it is recovering. This is why!
— Glenn Kelman (@glennkelman) January 25, 2023
Kelman continued, some indicators of buyer demand (home tour attendance, meeting requests, number of offers, etc.) are still down from their pandemic highs, but are still below their recent highs in November. It is said that it has improved significantly from the lowest value of .
Kelman also said the current real estate market is much healthier than during previous recessions, with inventory levels still low by historical standards and less than 2% of homeowners making more money than their homes are worth. I pointed out that I owe it on a mortgage. By the way, more than 30% of his homeowners were behind on their mortgages during the 2008 housing crisis.
Additionally, Kelman said Redfin’s agents were surprised at how quickly the market changed.
July 16: Redfin Agent Shoshana Godwin said: , ‘please take it easy. ‘ enough. “
— Glenn Kelman (@glennkelman) January 25, 2023
“The market can still easily go down,” Kelman said.
So
Continued recovery in the housing market will benefit Redfin. After closing his loss-making RedfinNow home flipping business, the company is now focusing squarely on its highly regarded real estate brokerage business. A stronger housing market means more home sales transactions, which in turn increases Redfin’s profits and potentially even more for our shareholders.
Joe Tenebruso has no positions in any of the mentioned stocks. The Motley Fool invests in and recommends Redfin. The Motley Fool U.S. Headquarters recommends the following options: His February 2023 Short His $7 Call on Redfin. The Motley Fool’s U.S. headquarters has a disclosure policy.
