The Canada factor
We don't do a lot of talking about the Canadian real estate market on Millionacres, but our neighbor to the north has been going through a massive increase in prices, especially in Toronto and Vancouver. This is a huge benefit to RE/MAX, which is the top residential brokerage in Canada.
The most recent data from the Canadian Real Estate Association saw the national average sale price rise 25.9% year over year in June. Sales are now down 25% from their peak, but this is still a very active market. RE/MAX's purchase of RE/MAX INTEGRA, which was finalized in July, will bring over 12,000 more Canadian agents into the fold.
RE/MAX is happy, but is the market listening?
There are four main things to know about the current housing market:
- Prices are historically high.
- Inventory is low.
- Homes are selling fast.
- Interest rates are low.
Change any one of those factors, and the others start to shift as well. But a bit more inventory isn't a bad thing. In fact, RE/MAX sees a balanced market as a positive.
Because of its acquisition of RE/MAX INTEGRA, the company is raising its guidance to forecast revenue from $321 million to $336 million, up from $300 million to $310 million. This should be good news, but from an investor perspective, RE/MAX's stock price is a little disappointing even in this strong residential market.
Investors as a whole tend to reward companies that are considered disruptors, such as eXp World Holdings, which has seen its share price accelerate rapidly. The market's mind may shift as the Motto mortgage network grows and RE/MAX continues to make smart, tech-focused acquisitions.