Home prices will continue to appreciate as long as there is limited supply, says Zillow Co-Founder

For more on housing, now let’s bring in Zillow, Co founder and former CEO Spencer Rascoff. Spencer, great to talk with you about this. If you own a home or two, this is all good, especially if you want to keep them. But most people are not necessarily in that position. So how does this end, you think? Yeah, I mean, Diana’s analysis, as usual is spot on. We are just going to continue to see home price appreciation as long as we have limited supply. We’re going to continue to have a limited supply as long as municipalities have anti development housing strategies and as long as there’s a mortgage rate lock in. And as Diana points out, most people can’t afford their current home, which means that even if they’re no longer in the home that’s right for them, they can’t really sell because they couldn’t afford the new hire rate. So we’re starting to see some thawing a little bit. Inventory is now growing about 1% per week. New listing volume last week was up 18% from a year ago. So it’s possible that some homeowners who are in the wrong home are starting to capitulate and just decide to list, even though they’re going to have to trade up to a higher mortgage rate. But we’re going to continue to see appreciation rates 5 1/2% year over year this past month in February. As long as we have limited supply. Yeah, but that seems so unsustainable. Let me put it this way. Either we’re going to have to rewrite the American dream, right? Or prices are going to have to come way down. I mean, you know, wages have already gone way up. They can’t go up too much more too precipitously or or you know these prices are going to have to come way down for this affordability issue to get solved. So what’s going to happen to which, well, we we are starting to rewrite the American Dream. I know that sounds kind of sort of depressing and maybe hyperbolic, but I mean people are pushing out first time home buyers are pushing out the time in which they buy their first home. It used to be in their late 20s. Now it’s going to moving into their mid and late 30s and people are increasingly house hacking and that a good example of this is Co ownership and we saw this in the Wall Street Journal today two billionaire Steve Wynn and Thomas Petterfly, Petterfi. They announced that they’re buying $110 million home in Aspen together. And you know this is what my company, Picasso is all about. It’s about creating Co ownership and we’re seeing it even at these incredibly high price points of over $100 million where people are saying hey maybe it doesn’t make sense to own all of a home myself. So house hacking, buying homes with people Co owning homes, these are some of and pushing out the time that I might buy my first home. These are some of the ways that people are adapting to these very low inventory environments and high mortgage rates. Yeah, we saw that article too. I had a similar back and forth about this within our show team. Of course, it raises the question, what does this mean for Picasa, which you Co founded, which we know is growing, in which we know just a couple of days ago announced a pretty broad expansion into lower priced housing. It’s great news for Picasso. I mean, Picasso tries to solve this issue of housing affordability. The only two ways to solve the housing affordability crisis are either number one, to build more homes or #2 to better utilize the existing housing stock. And that’s what Zillow, that’s what Picasso focuses on, which is better utilizing the existing housing stock. The way we do that is through Co ownership. So we’re having our Uber X moment right now where we’re dramatically expanding the number of markets we’re in. We just launched 200 more markets, 20,000 more listings and it’s working already. Searches are up 265%, mobile sessions are up 150%, home detail page views are up 50%, homes followed are up 75%. And so we’re already seeing people start to place deposits on these homes in all of these new destinations that we’ve launched nationwide as we rolled out hundreds of new markets. OK. I gotta shift here gears here a little bit with you Spencer, because we’re we’re very focused on this Disney proxy fight, the shareholder vote that’s taking place over these next couple days. It’s not the only company that is seeing a very contentious proxy season either. We know activists, investors have been very, very busy this year, much more active than they’ve been in in recent years. As somebody who has Co founded a number of companies who’s run a number of companies that were publicly traded, who’s been on the board of a number of companies, Just want to get your thoughts on this landscape that we’re in right now from a governance standpoint, from a management standpoint, from an investor standpoint. So it’s very case specific. I mean obviously there are some companies that are mismanaged and activists serve as a great catalyst to get those companies to pay attention and and get management teams and boards to to get their get their act together. There are other companies where let’s face it activists are making a stink and and front running their book in order to try to get the price to appreciate and then they dump and run. I think you know for me as a manager, as a former publicly traded CEO I tend to err on the side or I tend to to to fall down on the side of management in general if we’re if we’re speaking in in generalities as compared with activists, I think a lot of activists are are short term oriented and they’re trying to get the price up in the near term. Management teams are trying to manage the stock price for the long term, which is really what this should be all about is not short term stock price impact but long term appreciation. With respect to Disney, it looks like long term is winning out over short term. It looks like management is probably going to win this proxy battle and you know the activists will not win. Although the activists sort of always win in a way. It’s a kind of a heads, heads you win, tails tails they lose kind of situation. Because if management ends up winning these types of battles and the stock price appreciates, then activists win in any event.

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