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The housing market has been hot this year, thanks to a number of intersecting catalysts. However, it seems that Zillow (NASDAQ:Z, NASDAQ:ZG) struggles to withstand the heat. Over the weekend, the digital real estate company announced it would be pausing operations of its automated home turnaround business. This created an opportunity for the competitor Open door (NASDAQ:OPEN) and the OPEN stock.

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So what happened? And what do investors need to know now?

According to the Wall Street newspaper, Zillow announced that its automated home turnaround business will not pursue new home acquisitions. While it’s not clear how long this hiatus will last, writer Laura Forman suggests it could extend until the end of 2021.

Zillow’s decision stems from a few factors – primarily, it appears the company has had issues with the human workers it needs to support computerized processes. Forman writes that Zillow is experiencing a shortage of field workers and salespeople for his home turnaround business.

Rival Opendoor wasted no time in showing he could stand up to Zillow. Opendoor announced that it was “open for business and continues to develop and grow”. Co-founder Keith Rabois took to Twitter to hit on Zillow, saying “Opendoor is doing better than ever” and is “consistently profitable”.

Since then, the OPEN share has seen an increased volume of transactions and recorded good gains. Although stocks fell on Tuesday, they are up slightly over the past 5 days and over 30% for the month.

What does this mean for OPEN Stock?

As a quick reminder, Opendoor is a key player in the world of iBuying – companies that use technology to automatically bid on homes. These companies then manage the marketing and resale processes.

Zillow, through his home turnaround business, participates in the iBuying world. However, Opendoor has taken a step ahead in this emerging market. This is why the the Wall Street newspaper suggests that Zillow just opened the door to Opendoor and his rivals. These companies have not announced any breaks in home acquisitions, which makes them more attractive at the moment. However, the Newspaper Also gives investors a reason to proceed with caution: Median home selling prices have finally started to cool.

So how should investors do this? According to Investor place analyst Luke Lango, now is the time to take the plunge. In fact, he says:

“In short, buying Opendoor shares today could be like buying Amazon (NASDAQ:AMZN) stock in 1997 – before Amazon took over the retail world. … We see iBuying today as the place where e-commerce was in the late 90s – in the early stages of huge and disruptive growth.

Considering this, it looks like OPEN stock deserves to be on your radar regardless of the near term disruptions in the housing world. With Zillow revealing his weakness on the pitch, Opendoor is glowing.

Read more about what Lango has to say about the OPEN stock here.




InvestorPlace

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