John Campbell
John Campbell, is a managing director and real estate services equity analyst at the financial services firm Stephens. Little Rock, Arkansas. Stephens.com
There’s one area of the market where you can still find tech trading at bargain prices. Real estate has been the worst-performing sector in the S&P 500 in 2024, up only a bit more than 2% as of July 29 versus 15% for the broad index. Among the hardest-hit: Real estate technology (RE tech) companies that provide data through online platforms for buying, selling and financing homes.
RE tech stocks should bounce back when mortgage rates drop and home sales strengthen. Meanwhile, these tech companies benefit from a powerful, long-term trend—real estate remains one of the most outdated industries in the US economy. Think of all the unnecessary time, paperwork and costs to close on a house. Online companies streamline the process by aggregating services like home inspectors, title companies and mortgage providers. Attractively priced RE tech stocks now…
Zillow Group (Z) is the leading residential real estate website and home-price estimator in the US. The company also has moved into residential rental information. Recent share price: $49.14.
CoStar Group (CSGP). For decades, CoStar has dominated the business of providing commercial real estate data. It is spending billions of dollars with its acquisition of Homes.com to take on Zillow. Recent share price: $78.79.
Porch Group (PRCH) is for more aggressive investors. The fast-growing firm gives away its analytic and marketing software to home inspectors in exchange for access to the consumer, resulting in lower customer acquisition costs (CAC). The proprietary inspection data that runs through the software-as-a-service (SaaS) platform helps fuel proprietary insights for its underwriting efforts. Recent share price: $2.03.