TLDR
- Hedge fund manager Eric Jackson believes Opendoor Technologies could capture 10% of the housing market, similar to Tesla’s automotive industry goals.
- Jackson’s July endorsement drove Opendoor stock from $0.53 to over $10 per share in under three months.
- The company’s new management plans to offer sellers cash within three days of accepting offers.
- Jackson’s bullish outlook relies on Federal Reserve rate cuts bringing 30-year mortgage rates down from the current 6-7% range.
- The investor also holds a position in Better Home & Finance, viewing the entire housing sector as ready for growth.
Eric Jackson sees Opendoor Technologies becoming the Tesla of housing. The EMJ Capital founder told Business Insider he expects the real estate platform to capture 10% of total housing transactions.
Jackson’s public support for Opendoor in July triggered a massive rally. Shares climbed from $0.53 to over $10 in less than three months. The stock closed Tuesday at $9.29 before dropping 1.72% in after-hours trading.
The investor’s thesis centers on Opendoor’s ibuyer model. The platform offers cash for homes while simultaneously marketing properties to other buyers. This dual approach gives sellers options unavailable through traditional real estate channels.
Quick Liquidity Targets Distressed Sellers
Opendoor’s new management aims to provide cash within three days of offer acceptance. Jackson believes this speed addresses a key market need.
“Some people are in a distressed situation and they need to be able to monetize their house quickly,” Jackson said. The current housing environment creates opportunities for platforms offering rapid transactions.
The hedge fund manager drew direct parallels to Tesla’s automotive strategy. “That always was the goal for Tesla when they were getting started, to kind of go for 10% global market share,” he explained. “I think with the right product, the right customer service, they can get there.”
Jackson’s optimism depends on Federal Reserve policy. Current 30-year mortgage rates sit between 6% and 7%. “That’s not normal, I think we are due for reversion,” he said.
Lower rates would unlock housing market activity. More affordable borrowing costs could encourage both buyers and sellers to enter the market.
Tech Platforms Could Reduce Transaction Costs
Jackson isn’t only betting on Opendoor. In September, he disclosed a position in Better Home & Finance. The mortgage company’s stock jumped following his announcement.
The investor believes tech-forward companies can cut real estate transaction costs. Lower agent commissions represent one potential savings area. Faster closing times offer another advantage over traditional sales methods.
Jackson thinks Gen Z buyers would particularly benefit from these platforms. Younger generations have been largely absent from homeownership markets. Economists worry declining first-time buyer numbers could impact broader economic activity.
The housing market has challenged both buyers and sellers recently. High prices and elevated mortgage rates have sidelined potential buyers. Limited inventory and price-sensitive buyers have complicated matters for sellers.
Jackson views this environment as ideal for Opendoor’s expansion. The platform’s cash offer option provides certainty in uncertain markets. Three-day liquidity would drastically improve on current industry standards.
The investor sees early signs of housing sector renewal. His positions in both Opendoor and Better reflect confidence in the market’s direction. Both companies aim to streamline homebuying processes through technology.
Jackson sparked Opendoor’s summer rally with his bullish commentary. He continues to advocate for both companies as the housing market potentially enters a new growth phase.
