The real estate market has been hit by a lot of bad news in the first three months of this year, and it looks like it will only get worse in the coming months. Mortgage rates have remained elevated and are a pain for buyers. The Federal Reserve holding higher for longer with very slowly moderating inflation is not going to solve that problem anytime soon.
Lawrence Yun, chief economist at NAR, noted that consumers are gradually adapting to a new normal of mortgage rates between 6% and 7%.
There’s a lot of uncertainty about where this market could go. Prices are still high, and the Trump administration may still force the Fed to push rates lower. On the other hand, the trade wars combined with an AI slowdown could knock the entire market down, and the real estate market could fall significantly in such a scenario.
Some real estate stocks have already started falling, and there’s a good chance that some of them are already below their intrinsic value.
Aerial view of a city skyline with a modern real estate development in focus.
Methodology
For this article, I screened the worst-performing real estate stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. 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).
15. Stratus Properties Inc (NASDAQ:STRS)
Number of Hedge Fund Holders In Q4 2024: 1
Stratus Properties Inc (NASDAQ:STRS) is a real estate company that primarily operates in Austin, Texas, and select Texas markets.
The stock is down significantly so far in 2025 as StockNews.com downgraded Stratus Properties from “Hold” to “Sell.” They cited its valuation and financial performance.
The company doesn’t have the best financials, either. It reported a net loss of $0.4 million in Q3 2024 and $1.7 million in Q2 2024. There has been some improvement compared to prior-year losses, but the company is still making losses.
Stratus has been heavily reliant on debt refinancing to manage its projects. For instance, the company recently refinanced loans for properties like Lantana Place and Kingwood Place but remains exposed to high debt-to-equity ratios and rising interest rates.
STRS stock is down 7.71% year-to-date.
14. FRP Holdings Inc (NASDAQ:FRPH)
Number of Hedge Fund Holders In Q4 2024: 9
FRP Holdings Inc (NASDAQ:FRPH) is a real estate holding and development company.
The stock is down significantly so far in 2025 due to a key tenant occupying 50,000 square feet of industrial space (10% of its Industrial and Commercial segment) defaulted on its lease obligations.
This caused an 11% revenue decline and a 15% drop in net operating income (NOI) for the segment in Q4 2024.
The company also reported Q4 2024 net income of $1.68 million or $0.09 per share, down from $2.88 million or $0.15 per share in Q4 2023.
The company anticipates a significant drop in occupancy at its Cranberry Park property due to tenant exits. This will require time to stabilize through re-leasing efforts. Moreover, FRP is investing approximately $71 million in equity capital for industrial and multifamily developments in 2025, which is expected to temporarily detract from NOI until projects stabilize.
FRPH stock is down 7.97% year-to-date.
13. The RMR Group Inc (NASDAQ:RMR)
Number of Hedge Fund Holders In Q4 2024: 12
The RMR Group Inc (NASDAQ:RMR) is an alternative asset management company that focuses on commercial real estate.
The stock is down significantly so far in 2025 despite exceeding EPS expectations by reporting $0.46 (above the forecast of $0.41). This is because RMR missed revenue forecasts by $54.08 million and reported $219.48 million instead of the expected $273.56 million.
On top of that, RMR announced an expected drop in incentive fees, which are a key driver of its revenues. This led to projections of lower earnings over the next few years.
Plus, its Q2 2025 EPS guidance of $0.29-$0.30 fell significantly below consensus estimates of $0.39.
The consensus price target of $32 implies 72.88% upside.
RMR stock is down 8.17% year-to-date.
12. Logistic Properties of the Americas (NYSEAMERICAN:LPA)
Number of Hedge Fund Holders In Q4 2024: 1
Logistic Properties of the Americas (NYSEAMERICAN:LPA) is a real estate company that is mainly involved in industrial and logistics real estate properties in Costa Rica, Colombia, and Peru.
The stock is down significantly so far in 2025 due to investors raising concerns about LPA’s high leverage and asset quality in Colombia. This has led to a lot of negative sentiment surrounding the stock.
The company reported a profit margin of negative 78.99% and a return on equity of negative 12% over the trailing twelve months. It has also seen significant volatility, especially as LPA failed to provide a convincing growth outlook or address leverage concerns effectively at Citi’s conference.
LPA stock is down 13.13% year-to-date.
11. Landsea Homes Corp (NASDAQ:LSEA)
Number of Hedge Fund Holders In Q4 2024: 23
Landsea Homes Corp (NASDAQ:LSEA) is a Dallas-based residential homebuilder.
The stock is down significantly so far in 2025 due to it reporting weaker-than-expected guidance for 2025. Gross margins are projected at 13-14% on a GAAP basis for Q1 2025.
This is significantly lower than the industry average, with full-year gross margins expected at only 15% GAAP (20% adjusted).
Moreover, Landsea’s debt-to-capital ratio increased to 51.8% by December 31, 2024, compared to 44.1% a year earlier.
Barclays then reduced its price target for Landsea Homes from $9.00 to $7.00 and maintained an “equal weight” rating. There have also been significant insider selling and activist investor pressure.
The consensus price target of $13.75 implies 88.1% upside.
LSEA stock is down 13.90% year-to-date.
10. Smith Douglas Homes Corp (NYSE:SDHC)
Number of Hedge Fund Holders In Q4 2024: 10
Smith Douglas Homes Corp (NYSE:SDHC) is a real estate company that sells single-family homes in the southeastern United States. It targets entry-level and empty-nest homebuyers.
The stock is down significantly so far in 2025 as Bank of America downgraded Smith Douglas Homes from “neutral” to “underperform” and slashed its price target from $33 to $22 in January.
Analysts also noted that the company’s return on equity (ROE) is expected to decline as delivery growth moderates and margins normalize.
Plus, rising mortgage rates have dampened demand for entry-level homes. This is the core market for the company, and higher lot costs and construction cost inflation have also squeezed margins across the homebuilding sector.
The company is set to release its fourth-quarter 2024 financial results on March 12, 2025.
The consensus price target of $25.4 implies 15.11% upside.
SDHC stock is down 14.20% year-to-date.
9. Forestar Group Inc (NYSE:FOR)
Number of Hedge Fund Holders In Q4 2024: 16
Forestar Group Inc (NYSE:FOR) is a residential lot development company.
The stock is down significantly so far in 2025 due to Forestar reporting Q1 2025 earnings that significantly missed expectations.
Revenue declined 18% year-over-year to $250.4 million, falling short of the $325.4 million forecast, while earnings per share (EPS) dropped 51% year-over-year to $0.32, compared to an expected $0.70.
Furthermore, Forestar announced a tender offer for its outstanding 3.850% Senior Notes due 2026 and issued $500 million in new senior unsecured notes at a higher interest rate of 6.500%. This can lead to increased borrowing costs and lower margins.
The consensus price target of $33 implies 48.79% upside.
FOR stock is down 14.62% year-to-date.
8. Cushman & Wakefield PLC (NYSE:CWK)
Number of Hedge Fund Holders In Q4 2024: 21
Cushman & Wakefield PLC (NYSE:CWK) is a commercial real estate services company that operates across 60 countries.
The stock is down significantly so far in 2025, as many analysts have been downgrading the stock and cutting price targets.
CWK was hit by a Jefferies downgrade in January of this year. It reduced CWK from a buy rating to a hold rating and reduced its price target from $18 to $14.
Moreover, Goldman Sachs cut its price target for CWK stock from $14.5 to $13 in February, and William Blair also issued a negative forecast for Cushman & Wakefield’s Q1 earnings and lowered EPS estimates in late February.
The consensus price target of $15 implies 34.57% upside.
CWK stock is down 15.06% year-to-date.
7. eXp World Holdings Inc (NASDAQ:EXPI)
Number of Hedge Fund Holders In Q4 2024: 17
eXp World Holdings Inc (NASDAQ:EXPI) is a global cloud-based real estate brokerage and tech platform. It processes residential and commercial property transactions.
The stock is down significantly so far in 2025 as eXp has been losing agents, with its agent count dropping from 89,156 to 87,515 by the end of 2023. This trend continued into early 2025.
In addition, eXp World Holdings announced the resignation of its Chief Accounting Officer and principal financial officer, Jian (Kent) Cheng, effective March 31, 2025. Before that, CEO Glenn Sanford sold $251,030 worth of company shares.
Despite a revenue increase in Q4 2024 to $1.1 billion (up 12% year-over-year), eXp reported a net loss of $9.5 million for the quarter and $21.3 million for the full year.
The consensus price target of $13.5 implies 39.46% upside.
EXPI stock is down 15.47% year-to-date.
6. Maui Land & Pineapple Co Inc (NYSE:MLP)
Number of Hedge Fund Holders In Q4 2024: 4
Maui Land & Pineapple Co Inc (NYSE:MLP) is a real estate company operating on Maui Island. It is very diversified across all real estate types and provides water utility services.
The stock is down significantly so far in 2025 as Maui Land & Pineapple announced a financial restatement on January 10, 2025. This raised a lot of concern among its investors since it disclosed errors in its financial reporting that required adjustments to prior periods.
The broader stock market being down has also hurt the stock a lot.
MLP stock is down 16.20% year-to-date.
5. Seritage Growth Properties (NYSE:SRG)
Number of Hedge Fund Holders In Q4 2024: 22
Seritage Growth Properties (NYSE:SRG) is a REIT that focuses on retail and mixed-use properties.
The stock is down significantly so far in 2025 due to Seritage amending its Senior Secured Term Loan Agreement with Berkshire Hathaway Life Insurance Company of Nebraska late last year.
This will allow the company to extend the maturity date by one year from the end of July 2025 to the end of July 2026. This will require a 2% fee on the outstanding principal amount at the original maturity date, so investors are spooked about earnings.
Furthermore, the company has been selling off properties as part of its Plan of Sale. This is expected to reduce debt, but it will also diminish future revenue-generating assets.
For example, the company posted $33.7 million in gross proceeds from two vacant property sales in 2024. However, investors are concerned about the shrinking portfolio and whether or not these sales are enough to cover debt and make sense long-term.
SRG stock is down 16.50% year-to-date.
4. RE/MAX Holdings Inc (NYSE:RMAX)
Number of Hedge Fund Holders In Q4 2024: 14
RE/MAX Holdings Inc (NYSE:RMAX) is a franchisor of real estate brokerage services.
The stock is down significantly so far in 2025 due to its Q4 2024 earnings report coming in weak.
RE/MAX Holdings reported revenue of $72.5 million, a decline of 5.4% year-over-year and below analyst expectations of $75.06 million.
Adjusted EBITDA did increase slightly, but the revenue miss spooked investors. The company also projected lower-than-expected revenue for Q1 2025 of $71–76 million and full-year 2025 revenue of $290–310 million.
Also, the company’s agent count has been declining year-over-year, and this is impacting its revenue streams.
The consensus price target of $8.75 implies 2.46% upside.
RMAX stock is down 20.15% year-to-date.
3. Seaport Entertainment Group Inc (NYSEAMERICAN:SEG)
Number of Hedge Fund Holders In Q4 2024: 13
Seaport Entertainment Group Inc (NYSEAMERICAN:SEG) is a real estate entertainment company.
The stock is down significantly so far in 2025 due to it reporting a net loss of $153.2 million for 2024, despite an 82% improvement from the prior year.
Revenue declined by 4% year-over-year to $111.1 million. This was driven by a 7% drop in sponsorships, events, and entertainment revenue and a 10% decline in hospitality revenue.
Operating costs rose by 10%, primarily due to higher general and administrative expenses associated with the company’s separation from Howard Hughes Holdings.
Moreover, equity losses from unconsolidated ventures amounted to $42.6 million. Interest expenses rose by 113% in 2024 due to reduced capitalized interest and higher costs related to secured mortgages.
SEG stock is down 20.89% year-to-date.
2. Opendoor Technologies Inc (NASDAQ:OPEN)
Number of Hedge Fund Holders In Q4 2024: 20
Opendoor Technologies Inc (NASDAQ:OPEN) is a digital platform for residential real estate transactions.
The stock is down significantly so far in 2025 due to weaker-than-expected Q1 2025 revenue guidance. Opendoor forecasted Q1 revenue between $1 billion and $1.075 billion. This is significantly below the consensus estimate of $1.33 billion.
On top of that, the company also projected an adjusted EBITDA loss of $40 million to $50 million for Q1 2025.
It also reported a Q4 2024 earnings per share (EPS) of negative 16 cents. Some analysts expected a loss of 14 cents.
The consensus price target of $1.7 implies 41.67% upside.
OPEN stock is down 25% year-to-date.
1. AMREP Corp (NYSE:AXR)
Number of Hedge Fund Holders In Q4 2024: 5
AMREP Corp (NYSE:AXR) is a real estate company that focuses on land development and homebuilding. It sells developed and undeveloped lots, as well as single-family homes in the U.S.
The stock is down significantly so far in 2025 due to a weak business outlook. AMREP reported a 41% year-over-year decrease in revenues for the quarter ended January 31, 2025.
Revenue fell to $7.52 million from $12.69 million in Q3 FY2024. This decline was primarily driven by a sharp drop in land sale revenues and other revenues.
Moreover, analysts see a lackluster short-term business outlook due to macro trends being against it.
AXR stock is down 36.08% year-to-date.
While we acknowledge the potential of AXR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AXR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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