As demand return to the housing market, the Seattle-based real estate brokerage Redfin is bringing a significant chunk of its furloughed staff back to the company. The company announced late Thursday that 35 percent — or roughly 350 employees, including agents — have returned to work.
The number of prospective homebuyers reaching out to Redfin lead agents or partner agents has surpassed pre-pandemic levels and is officially growing. For the seven days ended May 17, demand was higher than it was before the pandemic.
“The strength of the recovery has been surprising,” Wiener wrote in his weekly market-specific blog post.
“New cases of the coronavirus have certainly tapered from their peaks back in April, but over 20,000 new cases are still being reported daily in the U.S. and last week another 2.4 million workers filed for unemployment benefits,” Wiener added. “Home-buying demand seems to have been largely unaffected in the face of those headwinds.”
To meet that demand, Redfin brought back 35 percent of the staff it furloughed in early April, when the company announced it was furloughing roughly 1,000 employees and laying off 7 percent of its staff. At Redfin, real estate agents are salaried employees, rather than independent contractors, so they were included in that count.
The company had originally planned to furlough the agents until September 1, but during its first-quarter earnings call, CEO Glenn Kelman revealed that the company brought back 14 percent of furloughed employees, by May 1.
The steady homebuying demand is at least partially a result of low mortgage rates, with the average 30-year fixed-rate mortgage at record lows.
Wiener also cited a study from the Federal Reserve that found, while 13 percent reported a job loss or furlough in March or early April, that number was 39 percent for people with a household income less than $40,000.
“With job losses disproportionately affecting people with lower incomes, unemployment hasn’t had much effect on homebuying demand, yet,” Wiener wrote.
The weekly survey also found that the mass-migration from pricey metropolitan hubs to smaller cities and towns — which has been happening for years — is gaining even more steam as a result of the COVID-19 pandemic.
“The big question is whether this demand surge will be a quick burst of buyers who deferred their plans during the shutdown or if it’ll last much longer as people hunt for more space and more affordable homes,” Wiener said.
Redfin also found that total inventory has finally stabilized after hitting bottom. The number of homes for sale is down 23 percent for the seven days ending May, but the absolute count of homes for sale has inched up each day.
The lack of inventory is putting upward pressure on prices and constraining total home sales. For the seven days ending May 15, new pending sales are down 29 percent, year-over-year. However, that’s an improvement from the 40 percent declines seen in mid-April.
The median listing price — as a result of inventory not meeting demand — is up 6 percent year-over-year, compared to the same period a year prior.
“Many buyers assumed prices would fall as the pandemic set in, but sellers seem to be holding firm,” Wiener said. “The increase in home prices and stories from Redfin agents suggest that sellers who don’t sell are more likely to take their home off the market and wait rather than accept a lower price.”
“Some buyers are still out bargain shopping, but are finding there aren’t many deals to be had.”