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Warning! A Housing Market Crash Will Tank These 3 Stocks.



A chart showing the rise in home prices compared to average median salaries.

Investors have become too complacent about black swan risks.

If you feel like housing prices are out of control, you’re not alone.

A Pew Research survey conducted in 2021 found that half of Americans now consider the lack of affordable housing as a “major” problem, up from 39% in 2017. (Only 14% of Americans think it is not a problem at all).

Since then, housing costs have continued to rise. The National Association of Realtors now estimates that home prices will jump another 11% this year, outpacing wage growth by a 2x margin. The average U.S. home could soon be worth 7.5 years of median salary, up from 3.5 years in 1984.

Source: Chart by InvestorPlace

These problems have stemmed from high home prices, rather than stagnant wages. The price-to-rent ratio of the average American home now sits at 21x, almost three times higher than in 1963. Deducting typical expenses and maintenance, residential cap rates now sit below 4% for the first time in modern U.S. history, according to data from Cornerstone Research and CBRE. Cap rates are the expected rate of return on a real estate investment, commonly calculated as its net operating income (NOI) to acquisition price.

A chart showing the rise of price-to-rent ratios in the U.S.

Source: Chart by InvestorPlace

High prices and declining demand have sent chills through the homebuilding industry – a bellwether for the U.S. real estate market.

“Many prospective buyers have paused and moved to the sidelines amid higher mortgage rates, along with ongoing inflation and a range of macroeconomic and geopolitical concerns,” warned KB Home (NYSE:KBH) CEO Jeffrey Mezger in a recent earnings call.

The homebuilding firm would post guidance of $2 billion revenue, $350 million lower than Street estimates. Shares of KB Home have now lost 37% year to date.

Real estate analyst Ivy Zelman of Zelman & Associates now predicts a 9% drop in home prices by 2024. A decline to more historic pricing could see a 20% fall or more in real terms, a future I can foresee happening over the next several years.

Fintech’s Real Estate Problem

These concerns, however, have been largely ignored by a new generation of real estate fintech firms. Many of these companies have only come public in the past several years; firms like insurtech Lemonade (NYSE:LMNDhave never seen a financial crisis before. Others have only recently expanded into riskier elements of real estate. Much like banks in 2008, these unregulated fintechs could be sitting on time-bombs without ever knowing it.

Nowhere is this clearer than at Rocket Mortgage (NYSE:RKT), an online fintech that eclipsed Wells Fargo (NYSE:WFC) in 2018 as America’s largest mortgage writer.

In 2020, the Detroit-based fintech generated $16 billion in revenues and $9.4 billion in profits from a surge in mortgage refinancing. When a homeowner’s mortgage runs at 5%, he or she might gladly pay $20,000 to a company like Rocket Mortgage to refinance to a 2.5% rate.

Refinancings have turned into a windfall for Rocket Mortgage, which has used proceeds to load up on mortgages and their servicing rights (MSRs). At the end of 2021, RKT held $19 billion of mortgages on its books.

In good times, these strategies boost corporate bottom lines. Rocket Mortgage’s net income in 2021 was seven times higher than in 2018. Servicing fee income generated $1.3 billion in revenues that year.

But when the tide goes back out, it suddenly becomes clear why a bank like Wells Fargo was willing to cede ground so easily.

With demand for mortgage refinancings projected to collapse, analysts now expect Rocket’s net income to fall 98% to $214 million in 2022. Even worse, the $19 billion of mortgages on Rocket’s books could quickly become a powder-keg of bad assets if borrowers begin to default.

In the 2008 financial crisis, high banking leverage meant that the 15% decline in home prices magnified into far greater losses. Lehman Brothers’ 31x debt-to-equity ratio meant that a $2.8 billion loss was enough to trigger its complete downfall. Rocket’s 48x debt-to-equity ratio today means that a 2% decrease in assets is enough to wipe out its entire equity base.

No outsider will ever know for sure whether Rocket Mortgage’s balance sheet is as high-quality as management claims. But given finance’s long history of spectacular leverage and collapses, investors should tread carefully to avoid a repeat of history.

Leverage + Real Estate = Powder Keg

Fintech’s real estate leverage problem extends to iBuyers, companies that buy homes with the goal of flipping them for profit.

In November 2021, Zillow (NASDAQ:Z) announced it was exiting its iBuying business after losing over $1 billion in less than four years. And Redfin (NASDAQ:RDFN) has also backtracked from the business.

These firms failed despite concentrating on more homogenous housing markets like Phoenix. The “lemon” problem would have been even worse had they attempted to make sight-unseen, all-cash offers in Boston or another city with less uniform housing.

Yet, two real estate firms have continued to risk investor money: Opendoor Technologies (NASDAQ:OPEN) and Offerpad Solutions (NYSE:OPAD). Together, these two iBuying firms carry $11.6 billion in assets and $9.0 billion in liabilities, giving an average debt-to-equity ratio of 3.5x.

Ordinarily, investors would not worry about slightly elevated levels of debt. The average debt-to-equity ratio in the S&P 500 typically ranges in the 2.0x – 2.5x range, and blue-chip stocks like Gartner (NYSE:IT) and Amgen (NASDAQ:AMGN) can comfortably manage ratios of 5x or higher. These firms can use strong cash flows to cover interest payments ten times over.

But real estate companies generally require lower leverage because of their lumpier earnings. Today, the median U.S. real estate investment trust carries only 1x leverage, according to data from Thomson Reuters. And only nine of the 167 American-listed REITs have D/E ratios higher than Opendoor and Offerpad Solutions.

Meanwhile, Opendoor has already started warning investors that it could lose as much as $175 million in adjusted EBITDA this quarter. Add in interest and depreciation charges, and the firm could knock out over 15% of its equity value in a single quarter.

And home prices haven’t even fallen far yet.

If home prices fall 20% as the data suggests, Opendoor and Offerpad could quickly fall into a cash crunch. In the worst-case scenario, investors could see both firms go bankrupt within months.

The Dangers of a Rising Tide

The 12-year bull market has created a sense of complacency among younger real estate firms. On Aug. 3, CEO Glenn Sanford of real estate brokerage firm eXp World Holdings (NASDAQ:EXPI) announced record earnings.

“During the second quarter, eXp continued to increase its market share and revenue to record levels, reinforcing that our model was built for all market conditions and that our agent value proposition resonates around the world,” said Mr. Sanford.

Such claims are untested. The real estate brokerage was launched in October 2009, months after the bottom of the financial crisis. And its multi-level-marketing style of splitting commissions with recruiters is untested in bear markets.

I’ve warned investors before about the risks of buying fintechs focused on traditional, cut-throat business.

“Even though LMND has a fancy front-end website, its rear still looks like a P&C shop…

Lemonade will follow a similar all-or-nothing path to profitability. Either the company will become the next Geico (worth $50 billion or more) or it will blow up like so many other P&C insurers before it over mispriced risk.”

Since then, shares of Lemonade have lost 67% of their value.

But even these losses could pale in comparison to what Rocket, Opendoor and Offerpad could face if declining real estate values blow up their balance sheets. Highly leveraged firms are always playing with fire. This time, falling real estate prices could be the spark that turns into an inferno.

Published First on InvestorPlace. Read Here.

Featured Image Credit: Photo by Kindel Media; Pexels; Thank you!



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How to Find a Professional Design Team



Low-Cost Business Ideas for 2022

A business that wants to grow and scale will need a design team. According to Firstsiteguide, 70% of small-to-mid-sized enterprises invest more in their digital presence. As companies began to move online, the demand for user-friendly software to attract large numbers of customers has increased.

If existing enterprises require designers to create a website or application, startups also hire specialists to develop a product design. Software is essential for sales and recognition, so managers carefully approach personnel selection. If you’re looking for an experienced design team and want to know how to choose the best one, check out the tips for finding the perfect candidates.

When to Look for Designers

The online market is constantly improving, and with new digital features, customers are no longer willing to collaborate on the old model. To avoid losing your clients, you should keep up with innovations: update a legacy interface, introduce new communication ways and think about a payment system. Rapid adaptation gives the company a guarantee of maintaining sales and image.

Selling software needs a convenient and simple design, but only some entrepreneurs decide to improve it. To determine if it’s time to involve a designer in the project, analyze your situation:

  • you do not have a selling website design or your product design;
  • you are constantly selling your product or service using the software;
  • you are not satisfied with your design quality at the moment;
  • your potential users are not willing to interact with the content;
  • your product design is different from the design of the application.

If you are familiar with these issues, your business needs an experienced team of designers who will analyze the product and create a modern structure for productive work with clients and partners.

Types of Design Teams

Before starting the search for specialists, managers decide on cooperation options. There are two types of employees: in-house and outsourced. Each has its pros and cons, making a choice more difficult.

In-house Designers

In-house specialists are full-time employees engaged only in the company’s project. They are fully involved in internal workflows and communicate closely with the team. In-house designers understand the product they work with, its values, and its philosophy. It is much easier for the manager to control the result of such an employee and set new tasks at no additional cost.

In-house designers are well-versed only in a particular industry, so tasks from other niches can cause them difficulty. Also, constant work on one project can lead an employee to burnout and dismissal. The primary in-house designer disadvantage is the expense of sickness and vacation pay. While outsourcing teams only budget for working hours, a full-time employee also counts on vacation pay.

Outsourcing Team

The outsourcing team is specialists who come to the company for a specific project or task. They help businesses free up time for more important things or help with tasks businesses can’t handle. Each outsourcing specialist offers a wide range of knowledge as they constantly interact with different niches.

A significant advantage of companies providing outsourcing or outstaff services is strict personnel selection. They choose only experienced employees and introduce them to the modern features of the digital environment. Outsourced teams do not require payment in the event of an employee’s illness or vacation. If one of the employees falls ill or is unsuitable for your project, they replace them with another in a short time.

The main disadvantage of outsourcing is the price. You need to pay for each hour of work of each specialist, reducing the quality of cost control. Also, you will be unable to assign additional tasks to an outsourced designer in other areas, which sometimes burdens internal processes. Outsourcing workers cannot be trained for themselves, as they come to your company for a certain period and work only on the agreed tasks.

Signs of a Professional Design Team

Meeting future colleagues for the first time can take time to determine their competence fully. Since candidates want to make a good impression, they will highlight their good qualities while glossing over their flaws. Catch the details to avoid falling for this trick and make the right decision.

Creative Portfolio

The portfolio of a professional design team should impress every beholder. And this does not apply to individual works but to the entire portfolio. When selecting candidates, check the quality of each design rather than picking only the best.

To understand your compatibility with potential employees, find a project similar to yours in their examples. If the design team already has experience in your industry, they know how to interact with your audience and hook them for a successful sale. Experienced specialists will tell you about your niche’s design features, what design details they can add to software development, and which ones you should avoid.

Teamwork Ability

If you are hiring an outsourcing team for a project or using an outstaff, you need to determine how these people will interact with your full-time employees. Since designers communicate closely with developers and project managers, they will have to find a common language to understand and support each other. At the interview, ask your future designers about their attitude to working in a team with employees from different departments.

Organizational Skills

The outsourcing design team is fully responsible for the work specified in the contract. The project implementation is a long, complex process, but the specialist must adhere to the designated deadlines. The ability to self-organize and write a clear action plan to avoid going over budget is an important criterion when selecting web designers.

A person’s design skills, as well as managerial skills, play a significant role in the successful completion of a project. Experienced workers will competently build an action plan, and you will be calm about the timing of work completion.

Continuous Improvement

One of the vital signs of a good specialist in any field is the desire to grow and develop. Progress does not stand still, and the digital environment offers new solutions for IT engineers. Since any leader wants to make gradual progress in their product, they will opt for a designer who wants to learn something new and implement it into current projects.

An experienced worker will make changes to avoid confusing the client and let them get used to the latest software version. Thanks to the constant improvement of the user experience, the business will not only scale but also increase sales.

Where to Find a Professional Design Team

Finding a reliable outsourcing development team is a manager’s first and most challenging task. Many entrepreneurs need help finding professionals with extensive experience in their industry and how to make sure that they are experts.

The best way to search quickly is word of mouth. Ask for recommendations from your friends or colleagues who will tell you the right decision. You can also search the Internet yourself. The most popular sites for designers are Clutch, Dribbble, and Behance. These resources provide complete information about the company, customer reviews, ratings, and examples of work. Having found an attractive offer, you can read reviews about the design team on third-party resources and conclude.

Hiring employees is a responsible job that must be approached with caution. Don’t be afraid to ask questions to learn as much as you can about designers’ expertise. Hiring the right people can build a successful business and achieve your goals faster than your competitors.

Featured Image Credit: Provided by the Author; Thank you!

Elina Nazarova

Chief Marketing Officer of Powercode

Elina is accountable for digital strategy development and implementation. She is certified in business and startups development and has more than 5 years of experience in content writing and management. Her core belief is that well-designed digital transformation is able to lead any business to success.

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No Cookies? Helps Provide Privacy-First Actionable Data



Brad Anderson

The ongoing struggle over safe data management continues to heat up. Third-party cookies have had a bad rap for years, and while their future for providing actionable data remains murky, it doesn’t look good.

This leaves businesses scrambling to look for new, more ethical ways to collect and utilize customer data. This is especially the case in an information-first environment that has no intention of reducing the importance of analytics going forward. is a revolutionary e-commerce retention marketing solutions provider that has been sounding the alarm on the demise of third-party cookies for a while now. In response, the innovative brand has developed industry-leading identity resolution technology. This offers timely aid to companies looking for alternative customer data management solutions. has created a unique, user-friendly approach to first-party actionable data. Before considering its impact, though, let’s start with the major issue facing marketers at the moment: the slow but steady death of third-party cookies.

The Delayed (But Inevitable) Doom of Third-Party Cookies

Digital marketing has always relied on cookies. This browser-based form of tracking analyzes basic user behaviors, from dwell time and frequency of site visits to past purchases.

Sometimes brands gather this information directly from a consumer for internal use. Often, though, it’s collected by others and utilized across various other websites without consent — something called third-party cookies.

Third-party cookies are an unpopular form of data collection.

In fact, they’re not just unpopular. They’re unsafe, which is why Google has announced it will phase them out in the name of greater data protection and consumer security. However, the search engine giant has delayed this deprecation process to 2024 (as of the time of this writing).

Even with the delay, the removal of third-party cookies still poses very real concerns for e-commerce businesses. Any company that doesn’t want to be caught flat-footed by the shift when it does finally take place needs to find an alternative to third-party data now.

The Struggle to Capture Actionable Data from Customers

For those who lean on third-party data to market and engage with consumers, the impending doom of third-party cookies is a monumental concern.

Even for those who don’t tap the unsavory data source, it still leaves them with the challenge of capturing customer data first-hand — something referred to as first-party data. Brands can glean first-party data through various tools like surveys and sign-up forms, but these are only effective up to a certain point.

For instance, consider a customer who visits an e-commerce site from their desktop computer. The visitor ignores a request to sign up for their newsletter. They start looking at products and then leave without making a purchase.

They could be at any point in the sales journey. Perhaps they are discovering information on a sales page, adding items to their cart, or even looking for a promotional code. Regardless, if they leave before clicking that all-important “complete purchase” button, they disappear into the ether. They leave no possible way of following up.

To make matters worse, they might hop back onto the site later from their phone, and the company wouldn’t even know that it’s them. The visitor would have to start the purchase process all over again, too, making the likelihood of completing the activity that much lower.

All of this can be resolved with actionable data.

When a brand has basic customer data, it can reserve its clients’ past activity. It then catalogs their preferences and streamlines future purchases. With third-party data on the way out and a cookieless future ahead, though, companies must find effective ways to collect first-party data if they want to boost ROI.

That’s where comes into the picture. Streamlines First-Party Data Collection has developed a solution to first-party data collection in the form of its identity resolution software, Reclaim. This addresses a key area of underperforming ROI that the e-commerce retention marketing solutions provider refers to as “abandonment revenue.”

The definition of the term is in the name. When potential customers abandon a sales funnel, they leave unrealized revenue behind. When a company doesn’t have its website visitors’ personal information, it can’t follow up or provide personalized interactions.

Reclaim boosts abandonment revenue as much as 10 times over. The software does this by quickly and effectively tying unidentified customers to first-party cookies. This turns anonymous e-commerce site users into bonafide, real-world individuals.

The ability to identify who is on a site can have a dramatic effect on engagement (and consequentially ROI) by triggering different activities, such as cart abandonment emails and SMS flows. This leads to more browsing and greater dwell time.

One of the key factors of’s revolutionary marketing software is its ease of use. Reclaim doesn’t require days of setup and integration. It takes hours to implement the code and proliferate it across an e-commerce site. This creates a quick-and-easy, set-it-and-forget-it solution that businesses can use to start tapping into their abandonment revenue streams. The software is even designed to scale along with businesses as they grow.

No Cookies, No Problem

As third-party cookies continue to die a slow death, every e-commerce business faces the prospect of a dramatic change to the status quo. The question is, which enterprises will be able to find creative solutions to help them operate in a cookieless environment? offers a simple, effective way to outsource the issue of first-party data collection. Its Reclaim software takes less than a day to implement and integrates with countless e-commerce applications.

This fast application leads to near-immediate results in the form of boosted abandonment revenue. Customers begin receiving SMS and email communications through ethical first-party cookie connections that offer personalized messages and encourage results-oriented engagement.

To top it off, the service is affordable, and customers only pay for incremental performance. even offers its “Flow Insurance” as a 100% guaranteed refund if clients don’t see their abandonment flow revenue improve.

From the ease of use to its impressive impact,’s software solutions are showing e-commerce companies that it’s perfectly possible to not just survive but thrive in a cookieless world.

Featured Image Credit: Pixabay; Pexels; Thank you!

Brad Anderson

Editor In Chief at ReadWrite

Brad is the editor overseeing contributed content at He previously worked as an editor at PayPal and Crunchbase. You can reach him at brad at

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What is Metaverse and How is it Changing AR/VR World?




VR augmented reality has already been a mainstay of science fiction. The idea has been the subject of numerous works of fiction and popular media, but we are finally at the point where it can become a reality.

It’s safe to say that the Metaverse has been the subject of several discussions and arguments. While some see it as the future of technology, others dismiss it as nothing more than a fad. The reality is that the Metaverse is here to stay, and its effects on everything from our mental health to our ability to do our jobs will be profound.

The Metaverse: what is it?

The term “metaverse” refers to a network of socially-connected 3D virtual worlds. It’s defined as a simulated online setting that uses VR augmented reality, blockchain, and social media concepts to create environments that seem very much like the actual world but allow for more nuanced human participation.

Everything can be found there, from sports to conventions to retail therapy. Putting on a headset and logging into the virtual reality portal is the only way into Metaverse.

Moreover, Mark Zuckerberg, creator of Meta (formerly known as Facebook), estimates that it will take five to 10 years for the core features of the Facebook metaverse to become standard.

On the other hand, the Metaverse is growing at an astounding rate.

Even though not everyone has access to them, ultra-fast broadband connections, virtual reality headsets, and always-on online worlds are now a reality.

Now we will examine the two most distinguishing features of a Metaverse platform:


The Metaverse tech would combine elements of vr augmented reality. Space and time in a Metaverse app should feel roughly equivalent to real life.

Visual, aural, and kinetic interaction modalities are all possible in the real world. Similar digital collaborative opportunities are anticipated from a Metaverse platform.


One of the requirements for a successful Metaverse software is that it can function on multiple Metaverse systems (s).

Creating applications for the Metaverse hints at a wide range of untested technology possibilities.

The developers, whether newcomers to the Metaverse or established figures with deep roots, might create either restrictive or flexible features.

Furthermore, there is an abundance of resources that can be used to bring this envisioned future into being. Unreal Engine, Unity, Amazon Sumerian, Blender, and Maya are just a few examples of such development environments.

Learn more about the practical applications of the Metaverse and the benefits it provides by looking at examples from other industries.

According to Bloomberg Intelligence, the Metaverse technology market could be worth $2.5 trillion by 2030, up from a projected $800 billion in 2025.

The sector is getting the outside stimulation and attention it needs to change both vr augmented reality technology and the future. Let’s look at some pioneering initiatives that have led to the development of Metaverse tools.

For example, the Metaverse Rules contain the following:

Only one Metaverse exists. All people should have access to the Metaverse.

The Metaverse exists beyond everyone’s control. The Metaverse must be accessible most of the time.

Most importantly, the Metaverse doesn’t care about your hardware. Both the internet and networks are part of the Metaverse.

When you put on your VR headset, you enter a virtual reality (VR) environment called the Metaverse.

It has enormous potential in many areas, including retail, business, and the workplace. In the Metaverse, real and virtual worlds are fused using tools like VR augmented reality (AR), describing a vision of a linked 3D digital global (AR).

Virtual worlds like Decentraland and online gaming platforms, like The Sandbox, are only two examples of existing metaverses. Participation in the Metaverse is growing at an unprecedented rate in the game industry.

According to Participation in the Metaverse is growing at an unprecedented rate in the game industry according to 65 % of the global population has participated in media extravagance, such as viewing a television show, movie, or premiere within a video game or working together to create a live concert.

Who Uses the Metaverse the Most?

Sixty-nine percent of humans have engaged in social activity, meeting new people, attending a group gathering, or visiting a virtual world while playing a game.

Almost three-quarters (72%) of people on Earth have engaged in some form of financial activity within the Metaverse. This can include the purchase of virtual goods, the purchase of virtual money, the purchase of digital goods from digital markets, or the purchase or sale of other gamers.

Augmented Reality (AR) in the Virtual World

Market leaders like Facebook’s Mark Zuckerberg are betting big on the potential of the “embodied internet” that is the Metaverse. It’s either a virtual reality experience or something that can be brought into your life (via AR).

The popularity of virtual worlds is on the rise, but the actual Metaverse may be the future wave regarding augmented reality.

The most natural way to supply digital content to the human perceptual system is to incorporate it directly into our physical surroundings.

How Does Your Brain Make a Unified Representation to You?

Your brain creates a unified representation of the arena based on information gleaned from your senses of sight, hearing, touch, and movement.

As long as virtual factors are powerfully recognized in your environment in terms of space and time, this is possible with augmented reality, even with reasonably poor visual constancy.

Now that our ability to judge distance (or intensity perception) is refined, it is not hard to believe this.

Augmented reality will inevitably become the norm. It may replace smartphones and computers as the dominant interface to digital content, and it will undoubtedly eclipse virtual reality as the primary doorway to the Metaverse.

Augmented reality may give us superpowers, allowing us to change our surroundings with a finger or an eye.

VR Augmented Reality in the Metaverse

Customers can now bridge the gap between their digital and physical worlds by entering the Metaverse thanks to virtual reality.

We will be able to explore new locations and make reports more accessible to more people by using virtual versions of people, objects, and landscapes.

In a nutshell, it’s an alternate reality where you can do all sorts of things like go to class, work, a concert, or shop without ever leaving your house. Virtual reality allows users to experience events, shop, and learn about new opportunities. Augmented and mixed reality, on the other hand, will open hitherto unimaginable possibilities for enhancing the physical world around us.

There are already add-ons to the XR landscape, such as haptic commenting tools, that will allow us to feel the handshakes and embraces of our contacts no matter where we are physically located.

Featured Image Credit: Provided by the Author; Thank you!

Siva Subrahmanyam

SEO Analyst at PlugXR

A SEO Analyst at PlugXR, I manage the company’s search engine optimization strategy

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