Redfin is Confused and is Trying to Confuse Your About Home Values!

Redfin's CEO is as confused about how to run his business, and is trying ton confuse home buyers into either overpaying for a house or paying for features you don't really want or need.

Before we get into that, let's, as always, start with the data.

Mortgage rates continue their steady 6-7% bandwidth, closing this week slightly down at 6.59%, about the same as it has trended most of this year.

Inventory: nationally, housing stock continues at record lows for periods other than during the Pandemic, and has declined to match the rates of 2021. As I have repeatedly said, as long as inventory is low prices cannot go down much.

Redfin actually makes the connection in noting that it is the lack of inventory that is keeping home prices from falling.

First American's chief economist Mark Fleming also points out that even with increased delinquencies, there will not be a tsunami of foreclosures due to the historic high levels of equity that homeowners have in their homes currently.

One of the factors that the chicken-little doomsday the real estate market is crashing mentions is the number of delinquencies, but unlike the commercial market sector, the single family delinquency numbers have returned to the levels seen before the pandemic.

Locally, in Los Angeles, the market grew slightly in the direction of a seller's market, holding at a market action index of 43, higher than the last few months' rating of 41.

The award this week, for the 2nd week in a row (!) for most misleading news goes to Redfin. 

Now, in fairness, Redfin is a confused company. There was a time when their business model of replacing real estate agents worked, that was when they could spend investors money and build a business that did not have to make a profit.

As you can see from their stock history, the company sells for less than it did when it launched in 2017 at $21 a share, today selling for about $7.50 a share, meaning investors in their stock have lost about 2/3 of their investment. Ouch!

Last week their CEO made news by attempting to move their company back into a new "hybrid" office policy by requiring employees to work in the office two days a week. Now, the stated reason is that "change is necessary to our culture."

I worked for the largest individual real estate brokerage in the US, and we are fully remote. In fact, EXP Realty does not even have a corporate headquarters building, merely maintaing required offices for addresses as required for various governmental regulations.

Redfin was a company that originally was going to use technology to disrupt the real estate market, yet it seems that technology has in reality disrupted Redfin as it struggles to find its way to long-term growth.

This for a company that has NEVER made a profit.

This week, they win the award with misleading information with their series of blog posts of local markets and the "8 Home Remodeling Projects to Boost Your Property Value."

The created a blog for many local markets.

Now, what is wrong with this?

Well, when you read the headline, you might think that if you own a home you would add one of these features. They are telling sellers that these features exist in higher selling homes, like light fixtures, a large backyard, and an island bar, the first 3 they list. I mean, why would those items not make a house nicer? But, in fact, it just is telling you that these features are in higher priced homes, and that makes sense. Of course, in a higher priced home, you would expect better light fixtures, a larger backyard, and a larger kitchen, perhaps room for or with an island bar. But it only saying that's what you find in higher priced homes, not that you should add them to increase value, or pay for them when buying if you don't need them because "they add value," as they are not telling you that those individual features cost more to add, when you can, than they bring in higher prices. So, an article with pretty pictures, and impressive logic, but really is meaningless.
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Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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