Real Estate

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The CEO of real estate brokerage Redfin told CNBC on Friday there’s been a much-needed cooling in the booming housing market recently.

“For the past couple of weeks, housing has been hot instead of blazing hot, and it’s actually probably good for the market. We’ve been running too hot for too long,” Glenn Kelman said in an interview on “Closing Bell.”

“Sometimes you’ll hear an agent say, ‘Well, we only got five or 10 offers on this property instead of 15 or 20,’ so I still think we’ll be supply constrained. There are more buyers than sellers,” Kelman said.

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 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.”

Shares of Redfin rose 1.77% on Friday to close at $60.97 apiece. The stock is down 11% so far this year, but remains up 90% for the past 12 months.

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