Regular readers know I’ve been investing in real estate stocks and properties for over 25 years. And with these two lenses, I have an idea brewing in my head…
You see, before the pandemic shut down our economy, real estate stocks were down. In other words, the stock prices of these companies were low. But as soon as Covid gripped the world, these stocks began to rise – Wall Street was bullish. Some real estate stocks rose more than 500%!
For example, the brokerage I work for, Exp World Holdings Inc. (EXPI) rose from about $6 to almost $78! ReMax (RMAX) went from about $16 to $40. And RedFin (RDFN) ripped from about $14 to $95.
So Wall Street was bullish about the future of real estate stocks and drove their prices higher.
Now, it looks like the opposite is happening.
As you can see in the two-plus-year chart above, shares of Redfin (RDFN) hit a high of about $95. Since then, it’s in a free fall. Today it’s trading near $11. That’s about an 88% crushing!
And if you look at other real estate stocks, it’s a similar story from their peaks last year:
EXPI – down 70% COMP – down 70%
RMAX – down 44% Z – down 65%
RLGY – down 45% FTHM – down 75%
OPAD – down 75% OPEN – 68%
So, is Wall Street anticipating the best is over and foresee’s a real estate slow down in the months to come? Sure looks like a bearish set-up to me later this year.
I thought this was an interesting correlation to share. I’m not an investment advisor, nor do I give investment advice. But I’m paying attention to see how real estate stocks perform in relation to the real estate market… and visa versa.
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* Thinking About Buying a Beach Condo in Delray Beach? Check out my newest video.
*** Your Weekly INVENTORY Update ***
* 26 months ago there were over 54,000 properties available for sale in S. Florida.
* Last week there were 16,417 available.
* This morning Inventory stands at 17,317 *
(Six weeks ago we hit a “bottom” at 14,785. So inventory is up over 17% in just 52 days – I hope you’re following along).
