FOR US THANK YOU SO MUCH,
APPRECIATE IT GREAT REPORT.
SO MORTGAGE RATES ARE NOT THE
ONLY THING THAT ARE GOING UP
RENTAL AND HOME PRICES ARE
EXPECTED TO RISE EVEN MORE
THIS YEAR, THAT’S THE PREDICTION
ANYWAY.
SOME CITIES HAVE SEEN RECORD
HIGHS IN BOTH AREAS.
IN A FOX BUSINESS EXCLUSIVE I
WANT TO BRING IN THE CEO OF REAL
ESTATE WEBSITE REDFIN, GLENN
KELVIN.
GREAT TO HAVE YOU HERE.
>> GREAT TO BE HERE THANKS FOR
HAVING ME.
>> CHERYL: REDFIN, CERTAINLY
NOT THE ONLY PLAYER BUT YOU ARE
A MAJOR PLAYER IN THE REAL
ESTATE MARKET, LAUNCHING THIS
BRAND NEW RENTAL PORTION OF
YOUR SITE.
YOU’RE LAUNCHING THAT TODAY SO
YOU’RE GETTING INTO RENTALS, WHY
>> WELL, ONE IN THREE AMERICANS
RENT THEIR HOME INSTEAD OF OWN
IT.
YOU’RE GOING TO MOVE 13 TIMES IN
YOUR LIFE, A TO THOSE 13 MOVES
YOU’LL BE INTO A RENTAL
APARTMENT SO IT’S JUST A BASIC
EXPANSION OF OUR MISSION TO BE
ABLE TO HELP EVERYBODY FIND A
HOME.
>> CHERYL: WELL, LOOK,
CERTAINLY, AS GERRI WAS TALKING
ABOUT THE FACT THAT A LOT OF THE
FIRST TIME HOMEBUYERS HAVE
BEEN PRICED OUT OF THE MARKET,
MAYBE THAT CHANGES LATER ON IN
THE YEAR BUT FOR NOW THEY ARE
OUT.
THEY HAVE GOT TO RENT.
WHAT IS THE DEMAND PICTURE LIKE
OUT THERE RIGHT NOW?
IS IT AS COMPETITIVE AND ARE THE
INVENTORIES AS LOW AS WE’VE
BEEN HEARING FOR RENTALS?
>> INVENTORY IS LOW
ACROSS-THE-BOARD.
THERE’S A STRUCTURAL PROBLEM IN
AMERICA WE HAVEN’T BEEN ABLE TO
BUILD ENOUGH HOMES WHETHER IT’S
FOR RENT OR FOR SALE AND
INVESTORS HAVE BEEN TAKING
ADVANTAGE OF THAT AND SO AS A
RESULT, RENTS ARE THROUGH THE
ROOF, HOME PRICES ARE
THROUGH THE ROOF, THE COST OF
CAPITAL IS INCREASING, SO THAT’S
GOING TO BE HARDER FOR HOMEBUYER
S BUT ALSO HARDER
FOR THE PEOPLE RENTING A HOME
BECAUSE THAT CAPITAL COST
INCREASE IS GOING TO BE PASSED
ON TO THE PEOPLE LOOKING FOR A
PLACE TO LIVE.
>> CHERYL: ALSO YOU’VE GOT
PEOPLE LIKE BLACKROCK, FIRMS
LIKE BLACKROCK THAT OVER THE
LAST YEAR, I’VE TALKED ABOUT
IT A LOT, HAVE BEEN GOING OUT
AND BUYING HUGE CHUNKS OF HOMES.
I MEAN WE’RE TALKING WHOLE
DIVISIONS OF HOMES IN SOME OF
THESE MARKETS.
WAS THAT PART OF THE REASON YOU
DECIDED TO GET INTO THIS?
>> IT WASN’T A REASON WE
DECIDED TO GET INTO IT BUT IT’S
CERTAINLY A TREND THAT WE’VE
SEEN AND IT’S PROBABLY AN UN
INTENDED CONSEQUENCE OF
CREDIT REFORM THERE’S SO MANY
PEOPLE WHO CAN’T GET ACCESS TO A
MORTGAGE SO AS A RESULT THEY
WILL PAY WHATEVER THE RENT IS
AND INVESTORS ARE TAKING
ADVANTAGE OF THAT FACT, SO YOU
JUST HAVE AN AUDIENCE OF PEOPLE
WHERE NO MATTER WHAT THE RENT IS
GOING TO BE, THEY ARE NOT GOING
TO BE ABLE TO QUALIFY FOR A LOAN
, THEY AREN’T GOING TO BE
ABLE TO BUY A HOUSE THAT ALLOWS
RENTS TO RISE.
AS A RESULT, ALL THESE OTHER
PEOPLE WHO OWN A HOUSE ARE
SAYING SCREW IT.
I’M NOT GOING TO SELL IT.
I’M GOING TO RENT IT OUT.
INDIVIDUAL LANDLORDS BUT ALSO
THE BIG INVESTORS.
>> CHERYL: BUT THEN WHERE DO
YOU GO THAT’S THE QUESTION.
U.S. NEW HOME SALES DATA THIS IS
FEBRUARY, SALES FELL FOR THE
SECOND MONTH IN A ROW,
OKAY?
SINGLE FAMILY PURCHASES DOWN 2%,
MORTGAGE RATES THE 30 YEAR THIS
MORNING HIT 4.5%.
DOES THIS TELL YOU THAT WE ARE
GOING TO START TO SEE THESE
NUMBERS FALL AND THAT EVENTUALLY
, VALUES WILL COME
DOWN ON HOMES?
>> WELL, THERE’S CERTAINLY BEEN
A STEPBACK IN THE MARKET.
I THINK THE COMPARISON TO
FEBRUARY OF 2021 IS A TOUGH
COMPARISON BECAUSE IT WAS
ABSOLUTELY OFF THE CHAIN A YEAR
AGO.
WHAT WE’RE SEEING IS A DECLINE
IN TRAFFIC NOT JUST ON REDFIN
.COM BUT ALL REAL ESTATE
WEBSITES, LOWER ACTIVITY FOR
TOURING A HOME, NOT JUST
WITH REDFIN BROKERS BUT ACROSS
ALL BROKERAGES, WE’RE ABLE TO
MEASURE THIS DATA BECAUSE WE
JUST HAVE SO MANY PEOPLE ON OUR
WEBSITE AND WHAT THAT MEANS IS
THAT PEOPLE ARE RESPONDING TO
INTEREST RATES, THEY ARE ANXIOUS
ABOUT THE INCREASE IN HOME
PRICES, COMPOUNDED WITH THE COST
OF CAPITAL, SO YOUR MORTGAGE
PAYMENT IS UP 30% YEAR-ON-YEAR,
IF YOU JUST TAKE ACCOUNT OF
THOSE TWO FACTORS, AND THERE’S
SOME PEOPLE WHO SAY ENOUGH IS
ENOUGH.
OTHER PEOPLE ARE GOING TO RACE
TO BEAT THE RATE, BUT SOME FOLKS
JUST CAN’T DO IT ANYMORE, AND SO
I THINK YOU’RE GOING TO SEE
DEMAND COME DOWN.
IT’S STILL NOT GOING TO COME
DOWN TO THE POINT WHERE IT MEETS
SUPPLY.
WE ARE IN A SUPPLY CONSTRAINED
MARKET.
THERE JUST AREN’T ENOUGH HOMES
FOR SALE EVEN IF YOU CUT IN HALF
THE NUMBER OF PEOPLE TRYING TO
BUY THEM.
>> CHERYL: A LOT OF THE
BUILDERS ARE TRYING TO KEEP
UP WITH THIS , WITH DEMAND, SO I
DON’T KNOW.
WE’LL SEE.
ESPECIALLY IF THE SUPPLY CHAIN
IS NOW BETTER, MAYBE SOME OF
THOSE MATERIALS ARE COMING IN,
MAYBE YOU WILL SEE MORE
INVENTORY.
>> IT’S BETTER?
I HAVEN’T HEARD THAT.
>> CHERYL: IT’S A LITTLE
BETTER ACCORDING TO MY SOURCES.
OKAY REAL QUICK I’VE GOT TO ASK
YOU, HOT CITIES, HOT MARKETS
EVERYBODY ASKS ME THIS WHAT ARE
THE HOT MARKETS?
>> ALL IN THE SUN BELT SO IF
YOU LOOK AT THE AFFORDABLE PART
OF THE COUNTRY WHERE TAXES ARE
LOWER, FORT MYERS, FLORIDA,
TAMPA BAY, FLORIDA, ALBUQUERQUE,
NEW MEXICO, MOST OF TEXAS,
ALTHOUGH AUSTIN IS FINALLY
GETTING PRICED OUT, THOSE ARE
THE PLACES EVERYONE IS MOVING TO
, AND ITS BEEN LIKE THEY GO
FROM SEATTLE TO PORTLAND TO BOIS
E, IDAHO LOOKING FOR THE
NEXT PLACE WITH A GREAT
COST OF LIVING BUT ALSO
AFFORDABLE HOUSING.
>> CHERYL: AND FRESH AIR AND A
LOT OF ROOM, A LOT OF ROOM WITH
A LOT OF BACKYARD.
THAT’S THE COVID STORY.
>> YEAH.
>> CHERYL: ALL RIGHT, WELL
REALLY INTERESTING.
IT’S VERY INTERESTING TO SEE
AGAIN YOU’RE GETTING INTO
THAT RENTAL MARKET AND WE’LL SEE
IF BLACKROCK STAYS IN THE
RENTAL MARKET OR IF THEY
GET OUT OF IT.
THEY MADE A LOT OF MONEY AS WELL
, BUT OUR VIEWERS HAVE
TOO.
THANK YOU VERY MUCH, GLENN.
>> THANKS FOR HAVING ME.