Redfin Corp Stock Price, News & Analysis

In July 2020, 54% of Redfin offers faced bidding wars, a slight decrease from June's 56%. This trend persists despite economic challenges posed by the coronavirus pandemic, with record-low mortgage rates driving competition among homebuyers. Notably, the average 30-year mortgage rate fell below 3% for the first time. Salt Lake City, San Francisco, and San Diego lead in competition rates, while Las Vegas recorded the lowest at 32%. The housing market dynamics suggest potential shifts depending on future interest rates and remote work policies.

The median home sale price increased by 11% year-over-year to a record high of $315,000 for the week ending July 26, 2020, as reported by Redfin. This marks the largest price rise since early 2014. Demand from homebuyers is 27% higher compared to pre-pandemic levels, while active listings have decreased by 30%. Pending sales rose 12% year-over-year, though there are signs of a slight seasonal slowdown. The expiration of enhanced unemployment benefits could impact housing demand going forward.

In June, the median condo sale price fell 1.4% year-over-year to $252,000, marking a continuing decline that follows a robust price growth before the pandemic. In contrast, single-family homes saw a 2.6% increase in sale prices to $322,000. Condo sales dropped 31.3%, while pending sales declined 4%, indicating buyer hesitation, though demand is beginning to recover. The condo market is more competitive, with 41% selling within two weeks. Despite lower prices, buyers are increasingly drawn to condos due to affordability amidst low mortgage rates.

Redfin Corporation (NASDAQ: RDFN) announced its second-quarter financial results for 2020, reporting an 8% year-over-year revenue increase to $214 million. Despite this growth, gross profit declined by 5% to $46 million, alongside a net loss of $6.6 million, improved from a loss of $12.6 million in Q2 2019. Operating expenses decreased 17% to $50 million, representing 24% of revenue. Notably, Redfin achieved a market share of 0.93% in U.S. existing home sales and saved customers $39 million. The company emphasized its rapid adaptation to COVID-19 challenges and growing online demand.

According to a report from Redfin, nearly 45% of homebuyers made offers on properties they hadn't visited in person, marking the highest rate since at least 2015. This increased from 28% last year, driven by factors such as health concerns due to the pandemic and heightened competition in the housing market. Moreover, 27% of house hunters sought to relocate to different metro areas, compared to 25% in 2019. Virtual home tours have surged by 243%, reflecting changing buyer behavior during the pandemic.

In June 2020, 19.9% of successful offers from Redfin agents waived the inspection contingency, a significant increase from 13.2% in June 2019. Similarly, 20.6% waived the appraisal contingency, rising from 17.4% last year. Bidding wars intensified, with over half of Redfin's offers facing competition. Record-low mortgage rates below 3% fueled buyer demand, while active listings plummeted by 20.7% year-over-year. Buyers are employing various strategies to enhance their offers, such as waiving contingencies, which can pose risks.

Redfin reports that home listing prices surged 13% to a record $328,500 for the four-week period ending July 12, 2020. Closed sale prices rose 6%, with sale-to-list price ratios hitting 99%. Homebuyer activity remained strong, with a 12% increase in home tours and a 33% rise in the demand index. Despite ongoing pandemic challenges, buyers are responding to lower mortgage rates. However, new listings are 5% lower year-over-year, exacerbating supply shortages.

The national median home price reached an all-time high of $311,300 in June, reflecting a 2.8% year-over-year increase, as reported by Redfin. Despite challenges from the coronavirus pandemic, home prices are on the rise, driven by strong buyer demand. Pending sales saw a 5.4% annual uptick, marking the first increase since February, while new listings fell 11.6%. Active listings also decreased 20.7%. The market remains competitive, with homes selling quickly and often above list price, indicating a sellers' advantage.