Zillow Group, Inc. (ZG - Free Report) recently announced that it has resumed home buying for Zillow Offers in six more of its existing markets.
Notably, homeowners from Atlanta, San Antonio, Dallas and Austin in Texas as well as San Diego and Sacramento in California will now be able to sell their homes directly to Zillow Group via Zillow Offers.
Zillow Group has been gradually restarting its operations in existing markets after the temporary halt in home acquisitions in March due to the global COVID-19 outbreak. Markedly, the company resumed home buying in nine of its markets in the past month.
The decision to resume buying highlights the company’s confidence in the strength of the U.S. Real Estate space amid the pandemic. Moreover, the gradual resumption of operations is expected to boost investors’ confidence in the stock.
Talking about year-to-date price performance, shares of the company have returned 33.3% compared with the industry’s rise of 10.8%.
Zillow Group, Inc. Price and Consensus
Robust Safety Measures Hold Promise
Zillow Group has undertaken various initiatives to ensure health and safety of all its customers, employees and partners amid the ongoing pandemic.
Notably, under the guidance of new health advisor Regina Benjamin, the company’s ‘Move Forward. Stay Safe.’ initiative is aimed at protecting its stakeholders and making sure that potential customers are able to buy, sell or rent a home safely.
Moreover, by selling through Zillow Offers, homeowners can sell their homes with minimal in-person contact.
Meanwhile, customers are increasingly resorting to virtual tours of houses through the Zillow 3D Home app amid social distancing trends. Notably, agents created 525% more 3D home tours in April compared with February tally. Buyers will also be able to take virtual tours through local Zillow Group brokers or a Zillow Premier Agent.
These efforts are expected to aid the company attract more customers and enable them to close transactions digitally, as people opt for social distancing amid the outbreak. Further, enhanced cleaning and protective measures as part of Zillow Group’s ‘Clean, Protect, Distance’ protocol will ensure customer safety even during in-person tours.
Real Estate Showing Signs of Recovery
Despite the initial impact of the pandemic that brought the market to a standstill, the U.S. real estate market is starting to display early recovery trends.
As of May 30, new for-sale listings increased 19.3%, while newly pending sales rose 24.5% in the past month, per a recent Zillow Group report. Moreover, traffic to for-sale listings on Zillow Group increased 51% year over year as of May 24.
Per a realtor.com report, quoted by Mansion Global, home prices in the United States have also been rising. Notably, the median listing price surged to a record of $330K in May, up 1.6% year over year.
Further, real estate brokerage Redfin (RDFN - Free Report) has stated that as of May 31, demand for home buying is up 22% compared with pre-pandemic levels. The company is also witnessing a supply and demand recovery in major U.S. states like Chicago, Detroit, New Orleans and Seattle.
Thus, Zillow Group’s decision to resume home buying has well positioned the company to capitalize on the anticipated recovery of the real estate market after the pandemic. Moreover, it is likely to strengthen Zillow Group’s competitive position against Redfin that has also resumed its services across a few of its markets.
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 Dropbox, Inc. (DBX - Free Report) and Chegg, Inc. (CHGG - 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 Dropbox and Chegg is currently pegged at 32.5% and 30%, respectively.
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