At the beginning of the novel coronavirus pandemic, many investors held a skeptical view of my overall bullishness toward the market. Here’s the thing that they missed — the outbreak is an acute crisis, whereas the wave of technological innovations culminating in what I termed the “Roaring 2020s” is a long-term development decades in the making. Opendoor Technologies (NASDAQ:OPEN) is a perfect example of this, which is why I’m bullish on Opendoor stock.
As you know, the world is rapidly trending toward connectivity and anytime, anywhere convenience. With advancements in telecommunications technology (such as the 5G rollout), we have never been able to do more with greater scale and accessibility. Consequently, industries that hold fast to the increasingly anachronistic “analog” paradigm will be left in the dust.
Why do you think I’ve been pounding the table on cryptocurrencies? With one groundbreaking idea, a digital token not only sparked the concept of peer-to-peer payment systems but a truly viable digital economy. At the center of this innovation is the blockchain, a system that fosters immutable trust in a decentralized ecosystem.
One of the results of the cryptocurrency invention is, again, the anytime, anywhere convenience. Similarly, what virtual currencies did for finance and business transactions, Opendoor can do for the staid real estate market. Therefore, as a forward-looking investment, OPEN stock makes much logical sense.
Largely, this is due to how inconvenient and stressful the traditional real estate process is. Beyond the onerous paperwork, both buyers and sellers have pain points — an unexpected blip on the radar that can send a deal careening out of control.
However, with Opendoor’s streamlined process, the platform takes away many of these stressors. In addition, here are three other catalysts that support OPEN stock.
Pandemic Fears Incentivize Contactless Service
One of the biggest factors playing favorably into the hands of Opendoor stock is public fear of contracting Covid-19. True, many people are getting over their fears. Either that or cabin fever has struck some individuals so badly that they need to get out. This is one of the reasons why I’m bullish on airliners.
However, my optimism is spread out over years. Because at the end of the day, you’ve got to look at the data. According to the Bureau of Transportation statistics, the percentage of people staying home is still in double-digit territory above the year-ago level. As I just stated, there are many who are returning to their normal routine as jurisdictional regulations allow.
But it’s going to take time for the vast majority of the country to feel safe. Thus, Opendoor stock is relevant now thanks to its underlying contactless services for the real estate market. With OPEN’s platform, you can sell your home directly to the company, getting an instant offer and avoiding the traditional open house showing.
Variable Elimination Boosts Opendoor Stock
Throughout this crisis, many Americans living in crowded urban centers wanted to move out. Initially, this was due primarily to the raging coronavirus. Early last year, the SARS-CoV-2 virus was a huge variable. Not much was known about it, which made the move rational.
But another incentive to get away from costly metropolitan areas quickly arose: telecommuting. Thanks to our robust connectivity infrastructure, millions of employees were able to work effectively from home. Better yet, evidence suggests that workers are happy with the change in scenery. In fact, many companies may embrace it moving forward.
Essentially, this means that employees are no longer tethered to a specific location. It used to be that if you wanted to make it big in certain industries, you had to be where the action was; typically, the coastal cities. Now, you can call a rural area home — so long as you have internet access.
But the one area that prevents many from taking the leap is the variables involved in real estate transactions. You don’t want to pay mortgages on two homes if you don’t have to. However, with Opendoor’s convenient platform, you move when you want to, eliminating unknown costs.
In the new normal, that carries a premium, which is a benefit to Opendoor stock.
The Economy for Homebuyers Is Reasonably Strong
A few weeks back, fear began trickling down when the December jobs report was released. On the surface, the stats weren’t great. Rather than the modest gain anticipated by Wall Street analysts, the economy shed 140,000 jobs. According to the New York Times, this reversed job growth for the first time since last April.
Admittedly, this isn’t a great look for Opendoor stock and real estate-related investments. However, if you drill into the details, most of the job losses came from the broader hospitality industry. While I’m not discounting the real pain here, it’s important to realize that government shutdowns played a huge role in the labor market downturn.
More importantly, the economy for those who have the funds to even think about home purchases — college-educated workers, basically — is performing reasonably well. For instance, the unemployment rate for workers with a bachelor’s degree is 3.8%, just a few ticks shy of the unemployment rate of those with a master’s degree (3.5%).
In other words, the joblessness rate for skilled/educated workers is down to or close to where the national unemployment rate was prior to the pandemic. And that should support Opendoor stock for the time being until the economy improves for everyone.
On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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