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Zillow Group (ZG) Restarts Home Buying After Temporary Pause

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Zillow Group, Inc. (ZG - Free Report) recently announced that it has resumed home buying for Zillow Offers in four of its markets.

Notably, homeowners from Phoenix and Tucson in Arizona as well as Raleigh and Charlotte in North Carolina will now be able to sell their homes directly to Zillow. Moreover, the company expects to resume home buying in more of its markets soon.

Markedly, Zillow had temporarily halted home acquisitions in March for all of its markets due to the global COVID-19 outbreak. The decision to resume buying indicates the company’s confidence in the strength of the U.S. Real Estate space amid the pandemic.

The restart of Zillow’s operations is expected to boost investor confidence in the company’s stock. Notably, Zillow’s shares reached a high of $51.93 (indicating a rise of 7%) before closing at $49.44 (up 1.9%) following the announcement on May 18.

Talking about year-to-date price performance, shares of the company have returned 8.1% compared with the industry’s rise of 4.6%.

Zillow Group, Inc. Price and Consensus

 

Efforts to Improve Safety

Zillow is also undertaking measures to ensure the health and safety of all its customers, employees and partners amid the ongoing pandemic.

Notably, the company launched the ‘Move Forward. Stay Safe.’ initiative to protect its stakeholders and make sure that potential customers are able to move safely.

As part of the initiative, all Zillow-owned homes will now follow the ‘Clean, Protect, Distance’ (CPD) protocol which will enable the company to keep customers safe while they are touring houses. Additional cleaning regimens will be applied for all for-sale homes and personal protective equipment (PPE) is being recommended for all in-person tours.

Moreover, customers can take virtual tours of houses through the Zillow 3D Home app and will be able to close transactions digitally. Buyers will also be able to take virtual tours through local Zillow brokers or a Zillow Premier Agent.

These efforts are expected to aid the company attract more customers as people opt for social distancing amid the outbreak. Further, enhanced cleaning and protective measures will give them the confidence required to make the move.

Recovery in Real Estate Bodes Well

Despite the initial impact of the pandemic that brought the market to a standstill, the U.S. real estate market is showing early signs of recovery.

Per a realty.com report, quoted by Mansion Global, the number of new listings during the week ending May 2 dropped 39% year over year compared with decline of 43% in the previous week. Additionally, median listing prices increased 1.6% year over year, in line with the previous week’s figure. Nevertheless, the figure rose from the 0.3% increase during the week ending April 18.

Moreover, real estate brokerage Redfin (RDFN - Free Report) has stated that it is witnessing a supply and demand recovery in major U.S. states like Chicago, Detroit, New Orleans and Seattle. Notably, these cities have seen a decline in de-listings and growth in pending sales in the first few weeks of May, which hold promise for the market’s prospects.

Further, the Federal Reserve slashed interest rates in the range of 0-0.25% to boost the economy. This is expected to drive demand in the real estate market.

Thus, Zillow’s decision to resume home buying has well positioned it to capitalize on the anticipated recovery of the real estate market after the pandemic. Moreover, the company is expected to gain an edge over competitor Redfin, who also paused home buying in March but hasn’t yet made any announcements regarding the continuation of home acquisitions.

Zacks Rank & Other Stocks to Consider

Currently, Zillow Group carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector include Bandwidth (BAND - Free Report) and Nutanix (NTNX - Free Report) . Both stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Bandwidth and Nutanix is currently pegged at 13.55% and 8.93%, respectively.

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Zillow Group, Inc. (ZG) - free report >>

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Redfin Corporation (RDFN) - free report >>

Bandwidth Inc. (BAND) - free report >>

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