'An Improvement At Long Last' – Redfin CEO Glenn Kelman Sees A Turning Point In The Home Sales Market

Deidre Woollard
4 min read
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Could things truly be looking up in the housing market? Redfin CEO Glenn Kelman appeared on CNBC to discuss the state of residential real estate, and he is seeing positive signs based on September's results. “We saw an improvement at long last,” said Kelman. He explained that interest rates fell in August, but homebuyers had almost no reaction as they were waiting for the Federal Reserve to cut rates. That finally happened.

Redfin released a report showing that while pending U.S. home sales were flat year over year, it was the first time since January that the number didn’t decline. Pending sales rose in 27 out of the top 50 metropolitan areas. Redfin also measures data earlier in the homebuying cycle, including home tours and those numbers are up as well, signaling that sales may increase in the coming months.

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Redfin’s report showed that sales were up the most in Phoenix, with a 13% increase, followed by San Jose at 12% and Portland, OR at 10%. This is notable because these are places where home sales had recently fallen. The report also indicated that Florida's situation is less favorable, as insurance costs and climate concerns worry some buyers. Pending sales fell 18% yearly in West Palm Beach and were down 16% in Fort Lauderdale and Miami.

Kelman told CNBC that the rate cut may have come too late in the season to impact 2024 home sales numbers. Prime buying season traditionally runs from April through October. Kelman believes that in 2025, "homebuyers are going to say game on."

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The other part of real estate growth will be a rise in inventory. Kelman is less optimistic about that side of the market. He called inventory the gating factor for home sales. He said that it's possible home sales for 2025 could rise to 4.5 million from a low of 3.9 million in 2024, but it is unlikely that five or six million homes will be sold.

Kelman also spoke about changes in the industry after new rules impacted buyer's agents. He explained that the changes have been localized so far. In markets like Los Angeles and San Francisco, where home prices are high, there is much more negotiation on buyer's agent commissions. He anticipates that there will be more bidding wars and more pressure on fees in the spring. "Increasingly, listings are being put on the market where the seller says, what I pay the buyer’s agent is negotiable," he added.

The issue of not enough homes for sale is a long-term problem. Kelman said that while the market can improve, it will not be "like gangbusters next year" and that inflation may still play a role. "Better days are ahead," he added, "but we aren't out of the woods yet."

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