Another Real Estate Bubble? Redfin Explains Why Nothttp://www.fool.com/investing/general/2013/08/17/another-real-estate-bubble-redfin-explains-why-not.aspx Austin Smith
August 17, 2013
The Motley Fool is out in Seattle, and today we stopped by Redfin to learn more about its unique position in the real estate industry. Vice President of Analytics and New Business Adam Wiener met with us to discuss how Redfin leverages technology to bring more value to the real estate transaction.
In the following video interview with the Fool's Austin Smith, Wiener shares Redfin's take on why rising home prices don't indicate another real estate bubble. The tech/real estate company tracks the market closely, including factors such as pricing, inventory levels, price-to-income ratios, and cash sales.
To view the full interview, click here.
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Austin Smith: I'm wondering, what sort of broad homeownership trends are you guys seeing right now? Obviously a very unusual market over the last few years. What's the 30,000-foot view look like? Who's buying homes? Where are they buying them? If you have any information on that.
Adam Wiener: Yeah, absolutely. It's something that we track very closely, obviously. We need to know what's going on in the market.
I would say there's been a broad-based recovery. We track, of the markets that Redfin is in, which is about 22 major metros around the U.S., and in basically every single one of those markets prices are up, year over year.
Buyers are coming back to the market, where I think a lot of people were really nervous to buy last year or the year before. Buyer confidence has definitely returned. I think that's certainly fueled by how low interest rates are right now, that affordability for homes is quite good, currently.
The challenge that we're facing is that there is not enough inventory in the market right now. We're still not yet at bubble-level pricing, so for the folks who bought in 2005, 2006, 2007, it's still difficult for them to sell their home, and even folks who could afford to, I think a lot of the sellers are holding out for better prices, so we have this inventory crunch.
What that means is that, for buyers