$Opendoor(OPEN)$
Nick Jones
Great. I guess, first, Carrie, could you remind us kind of what the impact of increasing interest rates might be in the business and Opendoor’s ability to kind of mitigate increasing interest rates and the impact, I guess, on the bottom line? And then the second question really is just record low kind of inventory levels or multi-decade low inventory levels. Maybe taking a step back, as things normalize, have you contemplated the pendulum swinging the other way? Did it kind of shift to a buyer’s market? When the frenzy is over, is it going to be a more challenged environment for maybe a different reason?
Carrie Wheeler
Great. Good to hear your voice, Nick, thanks for the question. So with respect to interest rates and in terms of our cost structure and what we might have to pass on to customers in terms of fees if there is an increase in rate, we’d expect that the impact actually would be quite modest. An example, 100 basis point increase in rates would translate to a 25 basis point move in our cost structure given our inventory turns, so quite manageable in our view.
The second part of your question just was around record low inventory levels but also just what if the market were to go from being very HPA positive right now to something more neutral or even negative. And what I would say is our model is really designed to work across all kinds of markets: up markets, flat markets, down markets. You should think of us as a market maker and also a provider. So in a market environment where HPA would have turned negative, we can choose to increase spreads to account for that decline. So declines in HPA will be offset by increased spreads. And certainly, in a down market, which is more uncertain for consumers, we believe that the certainty our product provides will be an even greater value to customers in that scenario.
Last point I would say is when you think about macro, for us, obviously, housing macro is always top of mind. But so is what’s going on right now is a massive secular tailwind that’s driving digital adoption. I believe that we are going to continue to be market share gainers across all cycles as a result of that. Certainly, we are right now. And we expect that the value proposition, as I said, only increases in times of uncertainty for sellers.
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$Opendoor(OPEN)$ 下面这段直接打脸$Zillow(Z)$
Accelerating adoption of the Opendoor solution is clearly reflected in our 3Q21 acquisition volume of over 15,000 homes, which represents an annualized acquisition GMV of well over $20 billion. That said, we are not immune to the labor and trade shortages affecting the housing industry, especially in the context of volume performance that is running significantly ahead of our internal plans.
$Opendoor(OPEN)$专门针对因为$Zillow(Z)$ 而质疑的声音
We are confident in our ability to manage to Contribution Margins of 4 to 6%1 on a sustained, annual basis, driven by our cost structure and the strength of our pricing and operational capabilities. Longer-term, we continue to expect Contribution Margin to be in the range of 7 to 9%1 , as the penetration of higher-margin services increases over time.
写在$Opendoor(OPEN)$ 三季报之前
1、$Zillow(Z)$ 的退出，是模式不可行，还是护城河高，让时间来说明。
2、房价涨是顺风，跌是逆风，从长期看，相抵，或者有略微的顺风。
3、新闻都是炒房失败，说opendoor的坏话也很多。分清楚其中多少是用户，多少是房地产经纪，多少是炒股的。
4、空头和多头的搏杀丝毫不影响生意，影响的是股价。问问自己，你买的是生意还是股价？
$Redfin(RDFN)$ 直接打脸$Zillow(Z)$
In our second channel for selling homes, through a cash offer rather than a brokered listing, we performed better than expected. RedfinNow’s year-over-year revenue growth was above 1,000 percent, though in RedfinNow’s case, the comparisons to the third quarter of 2020 are favorable, last year, we went into the third quarter with almost no homes to sell, having largely stopped making offers the quarter before.
But no matter what had happened the year before, RedfinNow could have grown to almost any size if we hadn’t been disciplined in how much we pay for homes. In March 2021, we began lowering RedfinNow offers, in anticipation of a summer deceleration in home-price increases.
In June, we based our RedfinNow offers on a calculation that the homes we bought would decline in value by the time we could get them on the market. We continued to reduce RedfinNow offers through early September. These were good decisions.
The sales closed in the third quarter have averaged 101.1% of the forecasted price. The sales RedfinNow has booked so far for the fourth quarter have averaged 100.0% of the forecasted price, the rate of those sales has been on pace with our expectations.
RedinNow’s main challenge has been renovations, the time we have needed to prepare a home for sale increased from 28 days in the second quarter to 37 days in the third quarter. Our ability to renovate homes fast is often the difference between a home that can only rise or fall in value with the market and one that sells for a premium within days of its debut.
For now, the additional holding and interest costs from renovation bottlenecks will likely lower fourth quarter property margins by about 35 basis points, but we still expect to generate a full-year gross profit, just as we had discussed in our February earnings call. We are expanding our renovations capacity quickly and already pricing higher renovation costs into our offers. Where our capacity to renovate a home is limited, we’ll limit the number of homes we buy. Our first priority is, as always, to build a sustainable business.
Since the sustainability of this business has gotten so much attention this week, you may wonder if Redfin’s hopes to compete as an iBuyer depend on being smarter, luckier, grittier, or just more cautious.
The answer is that Redfin isn’t an iBuying company at all. It’s part of what we do, but it’s not who we are. The way we define ourselves is as the company that offers homeowners the most complete set of options for selling one home and moving to another, where iBuying is one of those options.
We could never pitch customers on the convenience of a cash offer without highlighting that a brokered sale, especially at a fee as low as 1%, puts more money in their pocket. Having this choice is as important for Redfin as for our customers.
iBuyers that live or die on whether a homeowner chooses just one option, the cash offer, can thrive only when market conditions favor iBuying. Redfin can be more flexible. When home prices are uncertain, or when it becomes costly to borrow the money for buying houses, Redfin can buy fewer homes, and list more. That flexibility is more important than scale.
For the year, we already expect to average a gross profit on each home we sell. If we want an even higher margin, buying more homes at higher prices isn’t the only way to get it. Saving $20 by mowing three lawns on the same street won’t matter if we overpaid for one of those homes by $5,000. And if offering $5,000 less for a home limits RedfinNow’s scale because our customer is then more likely to list that home instead, all the better for Redfin’s brokerage and for our customer.
$Opendoor(OPEN)$ $Zillow Group C(Z)$ 运营能力!!!
Zillow (NASDAQ:Z) has reached its home-flipping capacity for the year and will hold off on agreeing to buy any more homes, Bloomberg reports, citing an email from a company spokesperson."We are beyond operational capacity in our Zillow Offers business and are not taking on additional contracts to purchase homes at this time," the spokesperson said in the email.The company, the real estate platform known for its Zestimates that gives an estimated value of users' homes using its algorithms, also buys homes, makes light repairs, then sells them in its Zillow Offers services.While the iBuying process is powered by technology and pools of capital, the service also relies on humans to inspect a property before Zillow (Z) agrees to purchase the property. And once it buys the property, workers are needed to replace carpets and repaint the home.The company is faced with the high demand for Zillow Offers and shortages of the workers used to fix up the property. As a result, it's halting new acquisitions until it can work through its backlog, Bloomberg said.Its main competitor, Opendoor Technologies (NASDAQ:OPEN) may stand to benefit from Zillow's (Z) pause.
这是一个投资者的留言。深有同感。作为一个消费者，我知道ibuying的价值，它击中我的痛点。我知道经纪拿走了比他们贡献多得多的价值，他们一定会被颠覆。当ibuying有足够市场份额时，房子的定价权在谁手上？这是一个远景，边走边看，饭一口口吃。
When I put 1/3 of my life savings in TSLA in 2013, I did so for the following hopes :
- Electrify transport
- Build power grids using renewables
- Develop battery technology for various applications
- Develop machine learning/self driving for various applicationsThe automobile was simply the carrier. I had no interest in investing in a car company.But the bears said the following (among other things) :- They are are a car company.
- Their cars are poorly made.
- They build cars inefficiently
- They lose money doing their various activities
- They are a car company.Were they wrong? Nope. They are 100% correct on those points. Absolutely. I have no debate whatsoever with them and never did.
...
(Years later, I retired in my late 30s.)
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OPEN is similar to me, they have a totally different lens regarding various things the society finds important related to selling houses :- Create liquidity in real estate market
- Map the county with machine learning
- Be an innovate part of the solution to the great housing crisis
- Eliminate the one-sided information structure of agents vs consumers
- Find a solution to the increasing globalized worker lifestyle requirements, which is a major blockage in our 21st century economic hopes.Those items have both tangible and intangible value. There are various speculations of what the value could be, but they will unfold with time as long as execution is correct.So, if you find those useful areas of investment opportunities, then invest in OPEN and go along for the ride in the development of new technologies, transaction methods, and cultural shifts in real estate, while a brand monopoly gets built. If you think youre a smarty pants because you discovered they lose X% flipping homes right now, go short.