Can This Real Estate Disruptor Recover From Its 95% Plunge in 2023?

With the real estate market grinding to a near halt in the second half of 2022, it shouldn't be too much of a surprise that many real estate stocks underperformed the stock

market in the recent downturn. But few were hit as hard as Redfin (NASDAQ: RDFN). Even after a recent rebound, Redfin is down by nearly 95% from its highs. However, there

could be light at the end of the tunnel. Here's a rundown of why Redfin has performed so poorly, the steps the company has taken to fix its problems, and a realistic look at what

could happen with the beaten-down stock in the next year or two. Why has Redfin fallen by 95% from the highs? In a nutshell, the biggest reason Redfin's stock has

performed so poorly is the U.S. real estate market essentially ground to a halt as mortgage rates skyrocketed and home prices increased 40% from pre-pandemic levels. Just

to name a few statistics, home sales fell 35% year over year in November, the largest decline on record. Home price gains in that month were the smallest year-over-year figure

since the market was essentially frozen in May 2020 because of the onset of the COVID-19 pandemic. Meanwhile, the supply of homes on the market increased 15% year over year in

early December, the largest inventory build since 2015, even though there were 20% fewer new listings. In other words, the inventory has grown because homes are lingering on the

market, not because more people are choosing to sell.