Hey everybody, I’m coming to you with a real estate market alert. I’m going to be providing to you today some information about the publicly held real estate companies that have recently had some news about them, and some pretty significant news that you need to be aware of. This information’s going to be helpful to you to keep abreast of what is going on in the market, the real estate market, and how that may eventually affect you. All right so I’m going to talk about the four biggest technology companies out there, most of these you’ve probably already heard of, you’re probably very familiar with them. There’s a whole bunch of other ones that we’re not going to talk about that have had some pretty significant news but they’re kind of smaller players out there.
All right so the first company we’re going to talk about is Redfin. Now Redfin recently had mentioned that they’re going to be laying off eight percent of their workforce. They have seen their stock market plummet down to about $8.13 a share from its high of about $30 a share that hit in the mid 2021, or early ’21. So that’s a significant decrease in its overall value, and with the announcement of the eight percent layoff, the CEO basically said yeah, we got to cut some costs, and we’re now going to focus on becoming profitable. Yes, profitable. I thought that was interesting since Redfin has been in existence for about 17 years, and now has decided that maybe profitability is something that we need to focus on. Well you know, that is the new economy that we happen to be in where profit is sometimes a distraction and not necessarily a goal. I don’t get it, but whatever, I understand that there’s other forces in play there. So that’s what’s going on with Redfin.
All right so the other company that we want to talk about is Compass. Now Compass is a national brokerage, actually has done a really good job of actually building up their brand and recognition and moving forward. However this last week they have announced that they are going to be laying off 10% of their staff, which is roughly about 450 folks. Now they have also seen a drastic reduction in their stock price over the last several months, and again just like Redfin and a lot of the other technology companies out there, they’ve never been profitable. So now they need to start focusing on becoming profitable. Not really quite sure how they’re going to manage that, however, time will tell.
Now the third company that actually had some news, you’re most likely very familiar with them, those are our friends over at Zillow. Now Zillow last year announced that they were pulling out of the house flipping business in which they took a significant hit financially after that announcement. So their news here recently hasn’t been as significant, maybe they saw exactly where the market was going last year and they were smarter than everybody else and decided to get out of it early. However, Zillow has decided to get out of the house flipping business. Last year they decided that, and now they are focusing on what their core competency is, and that is taking information from the local multiple listing services, which is provided by agents like me, and actually taking all that information and putting it on the website for you, the consumers, to be able to access super easily. So that’s their core business, they’ve done a great job at that, capitalized on it, and that is what they’re focused on. However here lately their stock market has taken a pretty big hit, and again, we’re just going to have to see how that all plays out for them.
The last company that you need to be aware of that has some pretty big news that hit the market is Opendoor. Now most of you are probably fairly familiar with Opendoor, again they are a house flipping company. Unlike Zillow, they don’t have the access to the multiple listing services to provide you on the real estate market, so they can’t back out of that business because that’s the business they’re in and there’s nothing else for them to do except for doing house flipping. So they got to figure out how to make this thing work. One of the challenges Opendoor has is that they have seen an 87% decrease in their price per share, or their market share since their high of February 2021. So once again that’s going to make it very difficult for Opendoor to be able to go out and actually raise more capital. Once again, not a profitable company. They took a loss of a half a billion dollars alone last year and I just don’t know how much longer they’re going to be able to go out and keep pumping money into this company. So again, it’s going to be really interesting to see how that plays out. I have noticed here locally, these are kind of interesting, last year, of all of the power buyers, and those are the institutional buyers, depending on what report you listen to and you read, they’ve bought up 18 to 20% of all the homes that hit the market last year. The power buyers or institutional buyers, bought in between 18 and 20% of those listings. That’s a big big number, and one of the reasons why buyers are having such a difficult time finding properties because they’re competing with the Opendoors out there. I have seen here lately that Opendoor is not being as aggressive with their pricing and their offers as they have been in the past. They were very competitive to the open market values in the past, and here recently, they are well below market value. So I think they’re starting to get it, which is great news for buyers out there, you’re not going to be competing head to head necessarily with Opendoor, you’re most likely going to be able to offer a little bit more money than what Opendoor would. So that’s all good news for all the buyers out there, and we’re just going to see how this all plays out.
So that’s the big news with these technology companies that are publicly held in the real estate sector, very interesting times out there for a lot of different reasons. But I thought this was really important information to get out to you folks to make sure that you’re on top of what is going on in the real estate market which obviously is going to eventually affect you and the value of your property. If you have any questions, make sure you reach out to me, we’re always here, love to see your comments. Have a great one.