As the coronavirus pandemic continued to rage on Wednesday, Redfin CEO Glenn Kelman said his firm is cutting back on the number of leads it sells to non-Redfin agents, that traffic to Redfin.com remains strong and that, despite tough times, real estate will recover from the current crisis.
Kelman made the comments during the latest episode of The Daily Dispatch podcast, which Inman founder Brad Inman launched last week. During his conversation with Inman, Kelman discussed the ongoing virus outbreak at length and advised industry leaders to be conscientious of their employees’ health.
Significantly, Kelman also revealed that Redfin is pulling back on its business of selling leads to third-party partners. Previously, Redfin had been selling between 40 and 50 percent of the leads it generated to non-Redfin agents. Kelman said the company opted to sell leads following the 2008 financial crisis as a kind of “buffer.” It meant that there was extra business the company could fall back on in the event of hard times.
Now those hard times have arrived. As a result, Redfin will be giving its own agents the leads it previously might have sold. The idea is to buoy up those agents’ incomes at a critical time.
“We’ve taken some of that demand away from partners and brought it back to ourselves so that our agents can prosper,” Kelman said. “And even then it might not be enough. Agent bonuses are going to be low in the next few months.”
Kelman didn’t say what percentage of Redfin’s leads the company will now divert to its own agents, but he did say it would be “most” of them.
“We can’t quite take all of it back because some of it’s three hours away from the nearest Redfin agent, but most of it we can take back,” he explained of the company’s lead generation business.
Kelman also said that traffic to his company’s website “has held up remarkably well” during the crisis.
“Mostly what we’re seeing is a massive decline in people bidding on properties and touring properties,” he explained. “But traffic to the site is holding up very well. And it’s especially holding up well given that fewer listings are debuting.”
Among other things, the CEO also argued that more nimble companies will likely be the ones to thrive during the crisis, and that his own firm is seeing massive growth in the use of its video tour tools. Two weeks ago, only about 0.5 percent of the companies tours were digital. That number jumped up to 12 percent last week, and has continued increasing as lockdowns and social distancing remain the norm across the U.S.
Kelman said that now, “about one in four tours are digital.”
“In places like San Francisco and Seattle it’s almost all of our tours,” he added.
The company first debuted video tours four years ago, and they weren’t initially popular. But Kelman expressed gratitude that the option was in place so that it could be relied on during the current crisis.
Though the real estate landscape remains grim in the short term, Kelman was optimistic about the more distant future. Among other things, he noted that “having been through 2008 you can’t scare me anymore, that was as bad as real estate can get.”
And in the end, Kelman thinks that demand is building up and the industry will rebound in the future.
“I’m not fundamentally worried about real estate as a business he said,” adding a moment later that, “I think when this economy comes back people are going to invest in the home.”
Listen to Kelman’s full interview on The Daily Dispatch here: