The overwhelming heat of the housing market has cooled to a more manageable level during the past few weeks, says Redfin’s CEO Glenn Kelman. Still, the same hurdles and demands continue for buyers, such as more affordable housing, more space, and little options. Instead of 15 to 20 offers on a property, Kelman tells CNBC that agents now say they’re receiving five to 10 offers. Housing inventory remains a struggle, but the recent cool down is welcomed for the market, says Kelman. Affordability could be one reason for the cool down, but the lack of options may be the more pressing reason buyers are holding off.
Some of the key reasons why housing demand has been so strong are still present, according to Kelman. Those include increased geographic flexibility thanks to Covid-related adoption of remote working and a move from high-tax states into lower-cost parts of the country. He said those tail winds will likely keep the interest in housing at elevated levels.
However, other factors have now developed to contribute to the tempering of demand, Kelman said. Soaring prices are part of the story, but not all of it, he contended.
“It’s also due to there’s not much good to buy. People come onto our website Redfin.com and they can’t even see a house that they love,” said Kelman, who’s led the company for about 15 years.
“A lot of it is just they don’t want to participate in these bidding wars. They’re tired of getting blown out,” Kelman also said. “We’ve had so many buyers say, ‘I’ll be back in a month or two, but I just need to take a break,’ because the psychological toll of losing weekend after weekend, offer after offer, has really been hard on some of our homebuyers.”