Howdy Redfinnians!
Here’s our monthly round-up of everything that moved in the U.S. real estate market!
But first the Redfin news… Do you remember in Gladiator, when Russell Crowe says “on my signal, unleash hell?” That’s what Redfin did last month, launching:
And we’ve got all sorts of performance metrics, too. Redfin compared its 2011 performance to the market average and found that we sold homes 15 days faster, and for $8,700 more money. And we just published numbers on Redfin Agent pay, which is well above the 85th percentile for full-time agents in almost every market we serve. We also shot a home-movie of Redfin customers and agents.
But what’s going on in the market? Prices went down, but we believe they’re now going up in lots of places. Sales volume slipped, but we think that’s because there’s nothing to buy. Every 300,000 years, the earth’s magnetic field flips, and lots of weird stuff happens then too. You want examples of weirdness in the housing market? You got it:
So that’s how it feels now. But what about the numbers? Well, nationally, prices are down 3.8%, and California has fallen more than 5%:
Why is this old news? As Bill McBride noted last week in Calculated Risk, “some portion of the Case-Shiller index will be for contract prices six or even seven months ago… the key point is that the Case-Shiller index will not catch the inflection point for house prices until well after the event happens.”
So the question is: has an inflection point arrived? But as we already predicted, the bottom is here. You can judge for yourself! Here’s what happening across the real estate market:
The monster under the bed is, as we said last month, interest rates. Pressure on rates has been building lately, despite the government’s insistence it’ll be able to keep rates low through 2014. The Wall Street Journal reported Monday that “investors have ramped up bets that a rise in the Fed’s key short-term interest rate, the federal funds rate, could come sooner.” For now rates are still just under 4%:
I like the article’s conclusion: “No one really knows what will happen when the Fed takes the punchbowl away, after so many years of rock-bottom rates.”
It’s a mixed metaphor but isn’t that perfect for these topsy-turvy times? Strap on your miner’s helmet. Grab your punchbowl plastic cup, and a bowl of popcorn too. This summer is going to be a wild ride. Questions, comments, fire away in the comments section below. And thanks as always for using Redfin!
Best, Glenn
Glenn Kelman | CEO, Redfin
