We had 3 consecutive record-breaking months of revenue in June, July and August, with nearly 50% higher revenue than those same months in 2019. As you can see from this chart of listings under contract / pending, which compares last year and this year, the pace of activity is only accelerating — and more listings under contract means even more future revenue.
The great news is: We now believe that the surge in business we’ve seen in June-July-August is not just pent-up demand or a delayed spring market — it’s net new demand creating a new normal.
There are a few major reasons why we’re so bullish:
- This pandemic, unlike other downturns, is inspiring people to move. After being stuck inside for months, people are more intimately aware of the inadequacies of their homes than ever before. Across every consumer category, people want homes with more space and this new demand is leading to an onslaught of ongoing transaction activity. Single family home sales reached the highest rate in 13 years this summer.
- Interest rates remain historically low. Mortgage rates have never been this low, mortgage applications are up significantly, and the Fed has stated they will wait until 2022 at the earliest to increase rates.
- Investors in the stock markets believe technology-powered real-estate companies will continue to have financial success and continue to give them capital to realize that success. Stock prices are a forward-looking assessment of what’s coming, not what’s past. Year to date, Zillow has nearly doubled in value and Redfin has more than doubled. And the story is even more dramatic if you look back a bit farther: Since Compass was last privately valued at $6.4 billion in July 2019, Zillow is up 81%, Redfin is up 178%, and eXp is up 318%.