Online real estate broker Redfin (NASDAQ: RDFN) has started to repopulate its employee ranks. The company revealed in its latest weekly business update that it has returned around 350 workers who were furloughed in early April, in the wake of the initial stages of the global SARS-CoV-2 coronavirus outbreak. At the time, Redfin put approximately 1,000 of its employees on furlough.
Redfin is making these moves because of what it terms a “rapid rise” in demand for purchasing homes. The company’s proprietary Homebuyer Demand Index indicates that in the week of May 17 this rise was 16.5% higher (on a seasonally adjusted basis) than in the pre-coronavirus period.
Redfin attributed this to pent-up demand, and mortgage rates that are touching all-time low rates (at least, for now). It said that 45% of the properties being bought in the seven days ended May 15 had been on the market for under two weeks.
Technology might be a factor in this. Redfin said that 3D virtual home tours are rapidly becoming more prevalent, which for obvious reasons is an advantage during this period of “stay in place” mandates throughout the world.
“The strength of the recovery has been surprising,” the company wrote in its update. It noted that given the still-spreading coronavirus and its deleterious effects on health and income, “[h]ome-buying demand seems to have been largely unaffected in the face of those headwinds.”
Investors appear to have found these developments encouraging for Redfin stock. The company’s shares rose by 7.2% on Friday. This well outpaced both the broader market and many tech stocks on the day.
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