Offerpad stock shot up Tuesday following weeks of gains by its competitor Opendoor, continuing a big month for publicly traded iBuyers in the eyes of investors.
Offerpad stock prices have risen 18.7 percent since markets opened Friday for the first time after the company went public. The stock spent the first days trading below its benchmark of $10 per share, but staged a comeback Tuesday, when prices spiked 27 percent. It has since settled back down around $10 per share in early trading Wednesday.
Meanwhile, investors in one of the company’s main publicly traded competitors, Opendoor, have seen their share prices grow by nearly 25 percent in the past month.
The generally positive stock price movement came after both publicly traded iBuyers posted profitable quarters, excluding stock-based compensation. But not all industry analysts are confident that success will continue.
“The iBuyers’ recent profitability is being driven by record home price appreciation — a temporary artifact of a hot housing market,” tech analyst Mike DelPrete wrote in a report on Wednesday. “As the market eases off its red hot highs, slowing price appreciation may have an adverse [effect] on iBuyer profit margins.”
Despite their aim to revolutionize the home market using technologies that have become popular in other industries, purchases by major iBuyers have yet to make up a significant share of real estate sales.
In recent months, iBuyers appear to have made progress establishing a firmer foothold within the broader home market. The four major iBuyer programs — including Zillow Offers and RedfinNow — have combined for nearly 1 percent of all home sales in the third quarter, according to a recent report by Zillow.
These buyers accounted for only 0.5 percent of homes purchased in the first quarter of this year, and had never eclipsed 0.8 percent in a single quarter before then, according to a Redfin analysis from June.
Still, these services offer a unique opportunity for sellers, and investor interest has clearly been piqued.
Roundup of iBuyer stocks
See below for a list of publicly traded companies with iBuyer services. Some companies with these services are not publicly traded, including Keller Williams, Knock and Orchard.
All stock prices in this article were current as of roughly 1 p.m. Wednesday on the East Coast. The change in Offerpad’s price below is only since the company went public last week.
Offerpad (OPAD)
- Services: primarily iBuyer
- Price per share: $10.68 (+18.7% since markets opened Sept. 2)
Opendoor (OPEN)
- Services: primarily iBuyer
- Price per share: $18.72 (+56.0% year over year)
Zillow (ZG)
- Services: real estate listings company with iBuyer service
- Price per share: $94.83 (+17.9% year over year)
Redfin (RDFN)
- Services: real estate brokerage with iBuyer service
- Price per share: $50.16 (+11.5% year over year)
eXp World Holdings (EXPI)
- Services: real estate brokerage with iBuyer service
- Price per share: $47.26 (+138.0% year over year)
