What's the word on the street? Share your questions, comments, and concerns below.

Here are the main points about the housing market outlook according to the CEO Glenn Kelman, taken from the earnings call:

“Home-buying demand significantly strengthened since September 18, when the Federal Reserve cut rates by 50 basis points. Mortgage rates had already fallen in anticipation of the Fed's cut, but home-buying demand had nonetheless been dreadful, leading to a new September low in the annualized rate of existing home sales, $3.8 million. What has been even more bizarre is that, since September 18 and even through last weekend, home-buyers have been mostly undeterred by an October increase in mortgage rates; the increasing likelihood of larger tariffs and government deficits has made debt investors anxious.

In my 19 month -- 19 years of running Redfin, l've never seen home-buyers react so slowly to a rate drop that lowered monthly payments by hundreds of dollars, then so unflinching as those savings disappeared. More and more, we live in our own reality.

And that reality is increasingly political. In September and even in October, a common source of anxiety among homebuyers has been the election, not just higher rates. With the election now over, many people who put off plans to buy or sell a home over the last two years may have run out of reasons to wait.

Home sales may increase in 2025, but the housing market and the world are so volatile that no one can say for sure.

Given that uncertainty, Redfin is glad to have made our core brokerage business more flexible, and to have lowered our overall employee census so we can quickly invest in advertising when we see more growth opportunities.”

Curtis Nagle, analyst at Bank of America:

“Great. Thanks very much. So, maybe a question for you, Glenn. Just I don't know, any view that in terms of this bump in activity that we've seen, I guess, through October that could perhaps be temporary, just kind of given the dynamic with rates. And yes, just kind of interested in your view there?

And then curious your thoughts on 2025 existing home volumes, do they grow? How much? What are your thoughts there?”

Glenn Kelman, CEO of Redfin:

“Well, it's been shocking, as I said, I've been doing this for a long time. And usually, there's a very strong inverse relationship between mortgage rates and sales activity. But even on election day, November 5th, we were surprised to see how many people were touring homes. We just have really good real-time data throughout the funnel because of our vertical integration, and it's been really strong.

And both Chris and I sit there pinching ourselves because sooner or later, it's going to take a toll. If rates keep climbing above 7%, there are people regardless of what they read in the media or how long they've been waiting are just priced out. So, I do expect the laws of physics to still apply to the housing market. And it's really hard to predict what's going to happen. I think there's so much geopolitical question right now, plenty of confidence about the new President and his plan for the economy, but also some concern about inflation driven by tariffs and just deficits.

So, really hard to say what's going to happen to interest rates, mortgage-backed securities investors are worried about it. That's why rates have traded up on really no Fed news, even including today. Rates have just gone up some because of geopolitical anxiety. So, it's really hard to say. If you're asking me, I do think 2025 is going to be better than 2024, especially kind of the September low, hitting 3.8%. And that's a number that's just way outside the strike zone of what we've seen over the past 20 years.”

https://www.businesswire.com/news/home/20241107894315/en/Redfin-Reports-Third-Quarter-2024-Financial-Results

As the latest round of Bay Area tech layoffs continue, a San Francisco-based real estate tech company announced Thursday it would be cutting 17% of its workforce, just a few weeks before the holidays. Opendoor, which maintains its headquarters on Post Street near Market, announced the layoffs in a letter to shareholders.

The reduction will see the company cut around 300 jobs and, according to the letter, is “part of a reorganization aimed at prioritizing strategic growth initiatives, flattening reporting structures, and driving efficiencies.”

https://www.kron4.com/news/bay-area/sf-based-opendoor-to-cut-300-jobs/amp/

Sorry for those who are affected but the company appears to be barely surviving.

The median home price increased 63% over that period, while overall inflation rose 31%.

https://listwithclever.com/research/housing-inflation-2024/

https://www.axios.com/2024/11/07/mortgage-rates-housing-trump

I am staying at an Airbnb right now, and some things have happened while staying here that prompted me to do a research on the house. In researching this house, I found that it was purchased by a LLC recently. So I go and look up the LLC out of curiosity, and learn this LLC has about 20 other LLCs with varying names under one big corporate name.

So I go deeper in my search and look up the owner of the LLC and find the name. So I search this name and find this person to be a higher up government official in the county I am staying at and works at managing the county’s HUD programs. So I’m like… maybe it’s not this person. I cross-reference the mailing address listed in all the business documents and do a research on that house. The house was indeed purchased by this individual and then transferred to a LLC. I look up that LLC name and it is tied to that business entity, so it’s obviously this individual.

Now, if my business ethics class served me anything is to maybe think this is a direct conflict of interest but I am not sure.

WWYD? Should I report it?

EDIT: where should I report this? If someone can guide here, I’d appreciate it as I’m overwhelmed. I’ve looked at HUD ethics line, but I think this applies only to fed workers.

There are a lot of houses I am interested in that get to about 60-100 days, then are pulled off market. Do you think these people are just going to relist later, decide to just hang on, turn to rentals etc?

A lot I never see come back. It's a weird situation of "dead" inventory they wanted to sell but couldn't, yet have currently given up on trying.

During the pandemic, when generous stimulus checks met limited consumption possibilities, Americans had saved more money than ever before, with the personal saving rate peaking at 32 percent in April 2020 and remaining above the pre-pandemic trend until the end of 2021. That’s when inflation started to bite, and people started utilizing these excess savings to support their spending.

What's the word on the street? Share your questions, comments, and concerns below.

https://www.bloomberg.com/news/articles/2024-11-07/home-prices-fall-most-since-2011-on-florida-s-southwestern-coast

An area along Florida’s west coast including affluent Sarasota is seeing the worst home price declines since the aftermath of the Great Recession, as the region recovers from hurricanes and faces rising inventory.

While home prices continue to rise across most of the country, metro areas in once-hot Florida and the Southeast dominate the short list of places where they are actually falling from a year ago in data from 226 metro areas compiled by the National Association of Realtors.

No region is seeing greater declines than Southwest Florida, a fast-growing area historically popular with Midwestern retirees. The Punta Gorda metro area had the biggest quarterly decline since 2011, with the median price falling 6.5% over the year to $350,000 in the third quarter, NAR data show. Fifty miles north, prices in the North Port-Sarasota-Bradenton area fell 5.8% over the year to $485,000, also the biggest decline since 2011.

Prices in the Southeast are under pressure from “more inventory, higher insurance costs, and more homebuilding in recent years,” NAR Chief Economist Lawrence Yun said in an email Thursday.

Tony Barrett, president of the Realtor Association of Sarasota and Manatee, chalked up the recent weakness in part to the effects of recent hurricanes, which delayed some sales and hurt buyers’ confidence. Meantime, the supply of homes has been rising, and fewer investors appear to be buying, he said in a September market report. Finally, the region has been coping with a surge in home insurance costs that has scared off some buyers.

Southwest Florida has been ravaged by storms lately, coping with flooding from Hurricane Debby in August and hurricanes Helene and Milton this fall. The latter storm made landfall just outside Sarasota, taking lives and destroying homes across the state.

Other metros seeing year-over-year drops last quarter were San Antonio-New Braunfels, Texas, and Durham-Chapel Hill, North Carolina. Both areas saw huge annual gains of more than 20% two years ago, NAR data show. Like in many other places where prices are easing, housing remains much more expensive than before the Covid pandemic — and unaffordable for the average household.

In a turnabout, some Midwestern areas that had remained relative bargains in recent years are now seeing outsize gains in existing-home prices. The two US metro areas with the fastest pace of growth last quarter were Racine, Wisconsin, where home prices rose 13.7% from a year earlier, and the Youngstown-Warren-Boardman, Ohio area, where prices climbed 13.1%, NAR data show. The median home price in Racine was $310,200 in the third quarter, while in Youngstown it was just $171,100.

Nationwide, the median price for an existing single-family home continued to rise in the third quarter, up 3.1% from a year ago to $418,700. All told, 87% of US metropolitan areas saw prices rise in the quarter, even if the pace of gains has slowed from a 4.9% annual increase in the second quarter.

https://www.bloomberg.com/news/articles/2024-11-07/americans-are-content-to-rent-as-market-tilts-away-from-buyers

Americans are coming to terms with renting as an alternative to an increasingly unaffordable market for homebuyers.

The share of respondents who say they’d rent if they were going to move rose to a record 36% in a new survey by Fannie Mae, the government-backed mortgage finance giant. The figure has climbed 10 percentage points in the past three years.

US renters took a big hit in the early pandemic years, with prices surging even as rock-bottom interest rates helped homeowners trim their mortgage bills and accumulate wealth. But the calculus has been shifting.

Mortgage rates soared after the Federal Reserve began tightening monetary policy, and after falling back a bit they’ve moved sharply higher again over the past 6 weeks. At around 7.25%, the cost of a 30-year mortgage — coupled with high home prices — is making many would-be buyers think twice. Meanwhile the worst of the rental spike appears over, with measures that look at newly-signed leases showing only a small annual rise.

“One effect of the prolonged period of relatively high home prices of the past four years is that we are seeing a slowly growing preference to rent rather than buy on consumers’ next move,” said Mark Palim, Fannie Mae’s chief economist, in a post. “With rent growth expected to remain modest in 2025, more consumers may be seeking – and finding – attractive deals in the rental market.”

The Fannie Mae October survey found that only one in five respondents said it was a good time to buy a home, down from 60% four years earlier.

https://wolfstreet.com/2024/11/06/longer-term-treasury-yields-mortgage-rates-explode-yield-curve-un-inverts-further-as-bond-market-gets-spooked/

Going to further crush demand for existing homes. Bondholders feel the pain.

By Wolf Richter for WOLF STREET.

What's the word on the street? Share your questions, comments, and concerns below.