Knock Knock. Who's There? Opendoor.

75 million millennials entering the housing market who expect to transact online

It has positive and improving unit economics.

Opendoor faces opposition from the realtors who still control the vast majority of the housing market and competition from Zillow, a company I respect tremendously that has a massive demand generation advantage.

Sellers enter their address, answer some questions, and receive an offer instantly.

And yet… the more I dig into Opendoor, the more bullish I get.

WFH is here to stay, so people are moving to higher quality-of-life cities

Centralized pricing gives it the best pulse on the market of anyone in it.

Opendoor closes with the seller quickly, makes repairs, and sells the home. Originally, it did this through agent partners, and increasingly, it’s bringing that process in-house.

Because Zillow’s main customers are agents, it can’t cut them out of the transaction, and ends up paying over 50% more than Opendoor on agent commissions. To lower this cost, it would have to risk pissing off the people who pay it the marketing fees that drive the majority of Zillow’s revenue and margin.

The Zillow threat is overblown. Opendoor has a range of advantages over Zillow in iBuying, which are borne out by the numbers.