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Eric Jackson has made two bullish calls, both on stocks tied to the housing market.
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The hedge fund managers sparked a rally in Opendoor in July and boosted Better stock in September.
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Jackson said he sees a new era ahead for the housing market, with both companies playing a key role.
The real estate market has been showing signs of thawing recently, and Eric Jackson thinks US housing could be on the cusp of a new chapter.
The founder of hedge fund EMJ Capital, Jackson is known for igniting a rally in Opendoor Technologies stock in July that has lifted the share price from $0.53 per share to over $10 in less than three months.
In September, Jackson revealed a position in Better Home & Finance, boosting the mortgage company’s stock price.
Jackson told Business Insider that he’s not just bullish on these stocks. He sees the entire housing market shifting in a direction that will benefit both firms.
He admitted that his optimistic stance hinges on the Federal Reserve continuing to lower interest rates, but in his view, big changes are coming, primarily because the 6%-7% range for the 30-year mortgage isn’t a sustainable trend.
“That’s not normal,” he stated. “I think we are due for reversion.
Until that happens, though, Jackson thinks Opendoor can play a key role in helping spur a fresh burst of activity.
For him, the opportunity lies in serving homeowners who need to sell their homes quickly but are having trouble doing so. The market in the last few years has been tough for buyers, but it’s not exactly been easy for sellers to navigate either.
That’s where a company like Opendoor comes in, Jackson says. Opendoor is an “ibuyer,” a real estate platform that not only helps match buyers and sellers, but will itself offer cash for homes on its site. That optionality—of having a cash offer in hand, while also being able to use the site to market your home to other potential buyers—is the key, Jackson says.
“Some people are in a distressed situation and they need to be able to monetize their house quickly,” he stated. “The goal now [for] the new management team is to get to a point where they could offer liquidity within three days of accepting an offer.”
Jackson thinks this business model can ultimately help Opendoor gradually expand its share of the housing market, ultimately reaching 10% of all real estate transaction volume.
“That always was the goal for Tesla when they were getting started, to kind of go for 10% global market share,” he told Business Insider. “I think with the right product, the right customer service, they can get there,” he added, referring to Opendoor.
