We recently compiled a list of the 10 Best Performing Real Estate Stocks to Buy According to Analysts. In this article, we are going to take a look at where The Real Brokerage Inc. (NASDAQ:REAX) stands against the other real estate stocks.
US Real Estate at a Glance
While uncertainty looms over the United States under the new admin in terms of tariffs, the real estate sector and especially new construction is expected to face some consequences. According to the chief economist at the National Association of Home Builders, the new tariffs could raise builder costs from $7,500 to $10,000 per home. With a third of the lumber utilized in US homebuilding coming from Canada, homebuilders will be impacted significantly by lumber cost increases. Paul Jannke, principal at Forest Economic Advisors, reiterated the adverse effects of these tariffs, stating:
“With the re-imposition of the 25% tariff on Canadian goods shipped to the U.S., we expect Canadian producers will stop shipping lumber to the U.S. Meanwhile, dealers, who have been hesitant to buy given uncertainty around the tariffs, will need to step up purchases ahead of the coming building season. This will drive prices higher.”
Danielle Hale, chief economist at Realtor.com, also discussed the potential impact of these tariffs on real estate as he said:
“Rising costs due to tariffs on imports will leave builders with few options. They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes”
Amidst tariffs, the housing market is already ‘in a deep freeze’ as mentioned by Mark Zandi, Moody’s Analytics chief economist, in his interview with CNBC. Although inventories are up, they continue to be extremely low by historical standards. According to Zandi, the market is not going to come back to life to any significant degree unless the mortgage rates come closer to 6% or even into the 5% range.
Our Methodology
In order to compile a list of the 10 best performing real estate stocks to buy according to analysts, we first used a stock screener to make an extended list of the relevant companies that have gained over the past year, as of March 4. After shortlisting the stocks with the most significant gains over the past year, we shortlisted the top 10 stocks with the highest upside potential, as of March 4. The 10 best performing real estate stocks to buy according to analysts have been arranged in ascending order of their average upside potential. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A business man holding a tablet, discussing the features of a Real Estate mobile-focused tech platform.
The Real Brokerage Inc. (NASDAQ:REAX)
Average Upside Potential: 20.72%
Gain Over Past 1 Year: 69.05%
Number of Hedge Fund Holders: 18
The Real Brokerage Inc. (NASDAQ:REAX) is a real estate technology company founded in 2014. The company delivers a single seamless end-to-end customer experience by combining essential real estate, mortgage and closing services with technology. It supports more than 22,000 agents using its digital brokerage platform with a presence in all 50 US states and Canada.
The Real Brokerage Inc. (NASDAQ:REAX) has taken a new approach to the old brokerage model through a disruptive, software-based real estate brokerage that aims to be the destination brokerage for all agents by providing them with higher value at a lower cost. It is worth mentioning that the company has grown its agent count by nearly 5x since the beginning of 2022. When compared to the peer average as of 2Q 2024, The Real Brokerage Inc. (NASDAQ:REAX) has surpassed in terms of agent growth and revenue growth year-over-year.
Underpinned by industry-leading growth and innovation, the company recently recorded another good quarter. The total value of completed real estate transactions hit $14.4 billion in 2024’s third quarter, up 78% over the year. Meanwhile, the total number of agents on the platform increased 79% year-over-year. The firm has also been striving to create a technology-first real estate experience as it announced the official launch of its first fintech product, Real Wallet, which enables US agents to access their earnings instantly. The Real Brokerage Inc. (NASDAQ:REAX) also introduced Leo CoPilot, an agent command center that anticipates every agent’s unique needs and offers personalized support.
Overall REAX ranks 5th on our list of the best performing real estate stocks to buy according to analysts. While we acknowledge the potential of REAX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than REAX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
