Market Shift: Buy High, Sell Low? A Real Estate Lead Gen Counter Example

Many Mortgage companies have laid off thousands of employees, real estate companies spoke (again) about reducing footprint and cost of office space, and reduced real estate lead gen budgets as consumer confidence fell while inflation and interest rates on homes skyrocketed – causing housing affordability to plummet. Yikes. The last six months shook me, perhaps you had a similar feeling – and many individual real estate agents took this as a sign to look elsewhere for work – that the golden era of easy home sales were done. Time to look for greener pastures.

However, we now have a very strong counter example from inside our industry. One company did not lay off people, nor cut spending in the last six months. Actually, they did the opposite. Opendoor has ramped up it’s ad spend significantly in the last six months. Actually, they’ve doubled what they spent in advertising for the same time last year. Doubled! They’ve already spent more than they did in all of 2021 in just the first six months of the year.

What’s more, is that now we can see a direct correlation between 2x of ad spend and 2x of business growth!

Shocking! Amazing!…. nah, not so much… 2x the spend, 2x the business? Yeah, that tracks. (If only there were a way for them to do lead gen more efficiently….)

There is obv a big question – can they make money on all those purchases if the homes dont appreciate. But that’s another blog post.

When the real estate and mortgage lead gen world ziggs, Opendoor Zagged.

I own Opendoor stock, who’s all time high was in Feb of 21 at $34.59/share – but its currently not worth much Actually as I write this OPEN is down near its all time low of $4.30 per share. (currently $4.70) is this a buy opportunity? It very well may be time for me to average down.

Look, I invested because I really like the model they’ve built. I think it has legs. And since Opendoor partnered with Zillow, I think they will become more efficient at lead gen going forward. And today, to see these numbers solidifies my feelings. Opendoor leadership’s attitude is like – the sky is falling? Our stock is dropping? Well, this is the hand we were delt. Let’s keep calm and let’s grow our business – and I think thats good advice to follow.

So where is your head going forward? Run for the hills or double down and grow like Opendoor?