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U.S. Sees Housing Boom Amid Economic Crisis

NOEL KING, HOST:

So if you look at the state of the economy, you might assume that the housing market is a mess. That, though, is not true. Stacey Vanek Smith and Cardiff Garcia, who host our podcast The Indicator, talked to the CEO of Redfin about a surprising housing boom.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

STACEY VANEK SMITH: Glenn Kelman has been the CEO of Redfin for 15 years. And he says for all that time, people looking for a home always put this one thing as their top priority.

GLENN KELMAN: What about the commute?

CARDIFF GARCIA: The commute to work.

VANEK SMITH: Yes, it's the old real estate mantra - right? - of time immemorial - location, location, location.

GARCIA: Yeah. And most of the time, those locations were big cities, where most of the jobs were concentrated. And as a result, buying a home in these cities had become a kind of blood sport.

KELMAN: The New York real estate market, the San Francisco real estate market - these were insane markets.

VANEK SMITH: Glenn says smaller cities, rural areas were just a different world. In fact, over the last few years, housing sales had been a little sluggish.

GARCIA: Yeah, that has changed. The National Association of Realtors announced last week that from May to June, just as the COVID-19 crisis was bearing down on businesses and millions of people were losing their jobs, pending home sales rose more than 16%. That's the biggest monthly rise on record.

VANEK SMITH: That is crazy to me because, you know, like, 1 in every 5 Americans is on unemployment. Like, it's, like, blowing my mind that homeownership rates might also be going up or that there's kind of a real estate boom. But it sounds like there is.

KELMAN: Well, it's white-collar professionals who are able to work from home. In some ways, this is a sign that the economy is just officially split in two. You have people who are worried about unemployment benefits running out. And at the same time, you have other people who are able to work from home and thinking about the home all the time. And that's where they want to spend their money.

GARCIA: Glenn says that for the people who are lucky enough to have kept their jobs, a huge number of them are working from home now.

KELMAN: So they're asking the question, well, why do I have to live close to the office? Why can't I live near family? Why can't I live in a place that's more affordable?

GARCIA: And that's changed everything.

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KELMAN: The traffic to listings that are in towns with populations of less than 50,000 people is up 87%.

VANEK SMITH: In other words, it's no longer location, location, location. It's more like space, space, space.

GARCIA: Glenn says, for example, that he is seeing a lot of requests for extra bedrooms for parents and grandparents. And he's seeing a lot of requests for extra rooms for offices and home gyms.

KELMAN: I think some of this is just that people are thinking more about their home, and some of it is that they can finally live wherever they want without asking their boss.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

GARCIA: And Glenn says he's also seeing a big migration of people out of big cities, like New York, LA, Chicago and San Francisco, to smaller cities, like Palm Springs, Tucson, Austin, Grand Rapids and Nashville.

VANEK SMITH: And those tiny San Francisco and New York apartments that had people in a bidding war - people are leaving those apartments in droves.

Stacey Vanek Smith.

GARCIA: Cardiff Garcia, NPR News.

(SOUNDBITE OF MOKHOV'S "ANGELIC BREATHS") Transcript provided by NPR, Copyright NPR.

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