Glenn Kelman on Market Trends, Home-Buying Hacks and Redfin Insights | E1871

Episode Summary

Executive Summary: Redfin CEO Glenn Kelman describes a housing market stalled by high mortgage rates and low affordability: buyers are holding back while homeowners cling to cheap existing mortgages. He argues the deeper crisis is a roughly five-million-home shortage that delays household formation and fuels generational discontent. Solutions include building more housing, easing regulation, stabilizing builder financing, and discouraging land banking. He also discusses Redfin’s renewed focus and the benefits and limits of hybrid work.

Main Topics: Housing-market standstill and affordability: High rates and historically low affordability have discouraged buyers, while homeowners with low-rate mortgages have little incentive to sell. Strong employment and wages mean fewer sellers are forced to list, producing unusually low activity rather than a conventional correction. Housing shortage and generational inequality: Kelman says the U.S. is short millions of homes, leaving younger people with less wealth and delaying marriage, children, and independent living. Older homeowners have benefited from appreciation while many younger households struggle to enter the market. How to buy and how long to stay: Kelman advises against trying to time the market. Buyers should focus on whether a home suits their needs and whether they can stay long enough to offset substantial transaction costs; the conversation suggests roughly six or seven years as a more comfortable horizon. Building more homes and policy proposals: The speakers discuss regulatory barriers, zoning, environmental review, and volatile financing as constraints on construction. Kelman supports federal involvement, more stable builder loans, accessory dwelling units, and higher taxes on unused land to encourage development. Second homes, short-term rentals, and local housing pressure: Second homes and Airbnb investment can reduce housing availability for local workers, particularly in resort communities. Kelman points to Canada’s steep taxes on certain unoccupied or investment properties as an example of a policy that prioritizes affordability over property values. Redfin’s reset and outlook: After layoffs and a difficult market, Kelman says Redfin has narrowed its focus, reduced costs, and learned which customer needs matter most. He expects growth to have greater impact on the bottom line, while acknowledging the challenges of the recent downturn. Hybrid work, culture, and collaboration: Kelman favors a hybrid arrangement at Redfin, with two in-office days, arguing that remote work can support productivity but makes collaboration, mentorship, and meaningful workplace relationships harder to replicate.

Key Arguments: The current housing slowdown differs from 2008: sellers are not being forced into distressed sales because employment, wages, and productivity remain strong, while many owners are reluctant to give up mortgages near 3%. For buyers, time in the home matters more than trying to predict market timing. Selling after only a few years can be costly because housing transactions consume a substantial share of the home’s value. The housing shortage is a structural social problem, not merely a market-cycle issue. Limited supply raises barriers to homeownership and contributes to delayed family formation and generational resentment. Increasing supply requires confronting local regulation and construction risk. Kelman proposes easier permitting, federal support, more predictable financing for builders, and incentives that make developing land more attractive than holding it unused. Second-home ownership and short-term-rental investment can displace local workers in constrained markets. Policies that raise the cost of leaving homes unoccupied may improve availability, though they involve trade-offs and can pressure property prices. Redfin’s downturn encouraged it to eliminate unfocused projects and concentrate on its core value proposition. Kelman believes operating leaner will allow future growth to flow more directly to the bottom line. In-person work is not necessarily about attendance or raw productivity; Kelman argues it can improve collaboration on ambiguous problems, mentorship, culture, and workplace relationships.

Data Points: Estimated U.S. housing shortage: About 5 million homes - Kelman’s estimate of the national supply gap. Housing affordability: At a four-decade low - Kelman’s description of conditions facing buyers. Share of national wealth at age 30: Baby boomers: about 30%; millennials: less than 20% - Kelman compares the generations at a similar stage of life. Typical housing transaction costs: About 5% to 10% of the home’s value - Kelman uses this to explain why buying and selling after only a few years can erode wealth. Suggested ownership horizon: Around 6 to 7 years - Kelman says he would feel more comfortable with seven years; the host summarizes six or seven as a reasonable horizon. Austin home-price depreciation: About 10 to 20 percentage points - Kelman describes the unusually sharp declines in boom-and-bust markets such as Austin. Redfin Q3 revenue: $269 million - The host cites this as Redfin revenue during the downturn. Redfin market capitalization change: Up 132% for the year - The host notes the company’s recovery and market capitalization above $1 billion. Redfin share price mentioned: From about $3 to $9 - Kelman describes the stock’s recovery and the hope that it could rise further. Redfin in-office schedule: Two days per week - Kelman describes the company’s hybrid arrangement at the time of the interview.

Pivotal Quotes: "So it's a real problem for American society that we don't have enough houses. We're about five million short." — Glenn Kelman: Kelman summarizes the scale of the supply shortage and its broader social consequences. "The real reason we don't have it is because not all of us want it." — Glenn Kelman: He argues that many homeowners oppose the density, construction, or lower property values that more affordable housing could entail. "It's not about productivity. We think you can be really productive at home. It's just actually that when you have some gnarly problem where you're totally freaked out about what are we going to do, and it's very unbound, it's just really easy to get in a room and it feels so good." — Glenn Kelman: Kelman explains why Redfin maintains in-person collaboration alongside remote work.

Implications: Housing affordability will remain difficult without substantial new supply and changes to incentives that favor building over land banking. Policies that increase density or tax unoccupied property face resistance from existing owners. For businesses, focused execution and deliberate hybrid practices may matter more than side projects or rigid attendance rules.