Home News ‘It’s a remarkably uncertain time’: Redfin CEO warns of rapidly cooling housing market — says deals under contract are being cancelled

‘It’s a remarkably uncertain time’: Redfin CEO warns of rapidly cooling housing market — says deals under contract are being cancelled

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After two brilliant years, the housing market is in turmoil as buyers retreat sharply. One real estate executive said the market was indeed correcting its course, making it harder to make deals as more deals failed to go through.

After the Federal Reserve hiked interest rates, “demand fell sharply in May and June …buyers were totally shaken,” said Redfin.
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CEO Glenn Kelman said in an interview with MarketWatch:

Since then, the housing market has recovered somewhat, but “we will continue to see very high cancellation rates, even for deals that are still under contract,” he noted.

“The economy is so volatile that it’s hard to get a deal done,” he added. “It’s a very uncertain time right now.”

“It’s just that the economy is so volatile that it’s difficult to close deals.”


— Redfin CEO Glenn Kelman

response to Buyer pulls back From the market, sellers are also becoming more and more anxious about listing.

New home listings fell 15% in the four weeks ending August 21st. A report released by Redfin on Thursday said:This is the largest decline in listings since the pandemic began.

According to Redfin, that has pushed housing supply down slightly, with the number of homes for sale down 0.6% from the past four weeks.

To find matches faster, sellers are pricing homes more aggressively, with the median asking price of newly listed homes down 5% from the all-time high recorded in May Falling.

However, not all sellers find enthusiastic buyers. In some hot pandemic markets like Boise, Idaho, 70% of homes for sale in July saw price cuts. Redfin said.

Builders are also trying to attract buyers and are “aggressive” about lowering prices, like second-hand home sellers, Kelman added.

“Some of the price adjustments in public records underestimate how dramatic the adjustments were.”


— Douglas C. Yearley, Chairman and CEO, Toll Brothers

Moreover 3rd Quarter Financial Results Briefing Wednesday, Toll Brothers
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Chairman and CEO Douglas C. Yearley said the company “started to increase incentives slightly” in recent weeks, with average incentives in August of about $30,000 for a $1.1 million home.

“Some of the price corrections in the public record underestimate how dramatic the corrections were,” Kelman added. Freebies such as granite countertops and appliances are not reflected in the list price.

But today’s home prices are still out of reach for millions of buyers.

Home prices plunged to their lowest level since 1989, National Association of Realtors OK.

According to Redfin, the median home sale price was $371,125. It is 6% higher than the previous year. After peaking in June when the median home price was $394,775, sales prices are down his 6%.

“In 2007, we predicted there would be a crash. We were selling houses to people who couldn’t afford them.


—Redfin CEO Glenn Kelman

For households with a 20% down payment and a 30-year fixed-rate mortgage, the typical monthly home payment is $1,944, up 54% from a year ago, according to the NAR. .

of 30 year fixed rate mortgage According to Freddie Mac, it averaged 5.55% as of Aug. 25. A year ago he was 2.68%.

Given the weak data and the withdrawal of buyers (and now sellers), industry experts see it as housing recession.

But that doesn’t necessarily mean the market is crashing, Kelman said.

“In 2007, we predicted there would be a crash. We were selling houses to people who couldn’t afford them, who couldn’t even pay their first mortgage,” Kelman said. I was.

“And it’s not,” he added. “There are trillions of dollars in money now, and people buying homes have excellent credit scores.”

according to New York Fed65% of the $758 billion in mortgage debt incurred in the second quarter of this year was to borrowers with credit scores above 760.

Thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan ([email protected]).

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