Zillow is not the only publicly traded company involved in this business model: Opendoor, founded in 2014, has been at this for over 7 years, and even with ridiculously strong revenue growth, is struggling to find a profit.

House For Sale, Investment, Property

Opendoor recently reported revenues of $2.27 billion for the third quarter, up from $338 million for the prior year period.

Digital real estate is still not yet a proven business model outside of lead generation and virtual showings.

Research and institutional investors coming into healthy markets and scooping up a majority of inventory is a concern to certain legislators who are looking at problems that it may produce.

Opendoor has yet to turn a profit, with its third-quarter earnings coming in at a $0.09 per share loss. According to the Wall Street Journal story, Opendoor sold 5,988 homes in the third quarter, which is up 72% from the second quarter.

Based upon the inventory shortage, Wall Street will appear to continue to buy up the available homes on the market as long as its rental margins produce predictable and sustainable bottom-line results. Question is: Does Wall Street help or hinder the health of the market? It was Wall Street’s over-involvement in lending criteria and selling subprime mortgages on the market that created the crash of 2007-08. This market represents a different model with its own potential caveats that could be detrimental in the long term.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.


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