5 Best Real Estate Stocks To Buy

1. Zillow Group, Inc. (NASDAQ:Z)

Number of Hedge Fund Holders: 65

Zillow Group, Inc. (NASDAQ:Z) operates real estate brands in the United States through mobile applications and websites. The company provides services, including premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, business technology solutions, mortgage originations, sale of mortgages, and title and escrow services. In the fourth quarter of 2023, Zillow Group, Inc. (NASDAQ:Z)’s revenue amounted to $474 million, surpassing the average analyst estimate of $451.4 million. Zillow is one of the top stocks to buy for real estate beginners. 

According to Insider Monkey’s fourth quarter database, 65 hedge funds were bullish on Zillow Group, Inc. (NASDAQ:Z), compared to 52 funds in the earlier quarter. Dorsal Capital Management is a prominent stakeholder of the company, with 3.05 million shares worth $176.4 million. 

Here is what Baron Asset Fund has to say about Zillow Group, Inc. (NASDAQ:Z) in its Q4 2021 investor letter:

“Real Estate investments detracted the most from relative performance, with real estate marketplace Zillow Group, Inc. accounting for all of the weakness. Zillow unexpectedly announced that it was exiting its home buying business, as it became apparent that the company had overpaid for many homes. We were surprised and disappointed by these developments and decided to exit our position in the company.

Zillow Group, Inc. operates the leading residential real estate websites in the U.S. In 2018, Zillow entered the iBuying market through its Zillow Offers unit, which purchased and resold homes, while also providing title, escrow, and mortgage services. By 2020, Zillow Offers had grown rapidly, was available in 25 markets and generated $1.7 billion in revenues. We were excited by the rapid growth in this business segment, and we believed that it could become a significant contributor to Zillow’s overall profitability. In November 2021, Zillow unexpectedly announced that it was exiting the home business, as it became apparent that the company had overpaid for a large number of homes, leading to a $500 million write-off. Their explanation for this shocking development was that the valuation algorithms they had developed had made dramatic errors. We were surprised and disappointed by these developments, which caused us to lose conviction in the company’s management and strategy. We exited the position during the quarter.”

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