Top 2 Real Estate Stocks That May Collapse This quarter

As of July 28, 2025, real estate stocks Uniti Group (UNIT) and Zillow Group (ZG) are exhibiting overbought conditions with RSI values of 81.7 and 73.4, respectively, indicating potential caution for momentum investors. Uniti has seen a 34% monthly gain ahead of its Q2 earnings on August 5, while Zillow, up 14% over the same period, recently had its Buy rating and $85 price target reiterated by DA Davidson.

Analysis

Two real estate sector stocks, Uniti Group (UNIT) and Zillow Group (ZG), are exhibiting technical signs of being overextended, posing a potential risk for momentum-focused investors. As of July 28, 2025, Uniti Group's Relative Strength Index (RSI) stands at a significantly overbought level of 81.7 following a 34% price surge over the past month. This strong momentum, reflected in an Edge Stock Rating momentum score of 83.99, is coupled with a low value score of 41.44, suggesting the rally may not be supported by underlying valuation. The company's upcoming Q2 earnings release on August 5 presents a critical near-term catalyst that will test the sustainability of this recent run-up. Similarly, Zillow Group shows an overbought RSI of 73.4 after a 14% gain in the last month. However, this technical warning is counterbalanced by a fundamental signal: on July 18, a DA Davidson analyst reiterated a Buy rating and an $85 price target, which is above its current price of $78.16. This creates a divergence between technical indicators suggesting a pullback and analyst sentiment pointing to further upside.

Key Decisions for Investors

• Given the overbought RSI levels above 70 for both UNIT and ZG, investors holding these names should consider the heightened risk of a short-term price correction and may re-evaluate position sizes or implement risk management strategies.
• For Uniti Group, the August 5 earnings report is a key binary event; it may be prudent to reduce exposure beforehand to mitigate volatility risk, as the stock's 34% monthly gain has likely priced in high expectations.
• Zillow presents a conflicting scenario where investors must weigh the overbought technical signal against a bullish analyst price target, suggesting long-term holders might maintain their position while short-term traders should be cautious of a potential pullback.
• Traders looking for new entry points should exercise caution, as initiating long positions at these overextended levels is risky; waiting for a consolidation period or a post-earnings reaction from Uniti could offer a more favorable entry.