What happened

The stock market is up huge on Nov. 9 on news that the coronavirus vaccine candidate from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) is proving highly effective. The S&P 500 is up more than 3%, while the Dow Jones Industrial Average is up almost 5%, putting both major indices on track to close at all-time highs today. 

But not all stocks are up, and a handful of companies have seen their share prices fall sharply today. As of 2:02 p.m. EST, four companies in the housing and home-improvement space are being particularly beaten up:

Blocks with 3 red and 4 green arrows pointing up and down.

Image source: Getty Images.

So what

In short, today's great news for most stocks is being viewed as, if not a negative, then not great news for these four companies. Today, investors are voting with their wallets that life will return to normal sooner rather than later, and that means selling out of companies that are viewed as benefiting more from restrictions on travel, work, and environments that involve lots of in-person human interaction. 

In the case of these four companies, investors are betting that people aren't likely to continue spending on home-improvement projects (Trex and Lowe's) or buying new homes (Redfin and Zillow) at the same pace we have seen in the past couple of quarters. 

Now what

There's no denying it: Zillow and Redfin have seen their results surge this year as more and more people have jumped into the home-buying market. Both companies reported earnings late last week, with Zillow highlighting strong traffic on its app and websites, and double-digit growth in its biggest segment. Redfin's CEO pointed out that net income increased more than fourfold in the quarter. 

Lowe's and Trex have profited from the millions of homeowners who've spent heavily on home improvement this year. Green decking maker Trex reported 20% growth in residential decking sales as homeowners update or add to their outdoor living spaces, while Lowe's has reported record comps and is expected to announce another record quarter later this month on massive growth in e-commerce sales. 

TREX Chart

TREX data by YCharts

A lot of consumers have diverted money they didn't spend on leisure and travel to home-improvement projects this year, and other people have made the move to buy a bigger house on the prospects of needing more space for a future including more remote working. Moreover, all four have delivered enormous, triple-digit gains for investors since the lows in late March. 

However, the prospect of returning to "normal" is likely to have a less-than-positive impact on companies in the housing and home-improvement space. So it's not surprising that some investors chose to "cash out" today and invest in stocks that may have better prospects in the post-COVID world. 

But there's the rub: We aren't in the post-COVID world yet. It's still going to be many months before any vaccine is widely available, and it's going to take many months after that availability to immunize enough people to begin the post-COVID transition back to normal society, including an economic recovery that will provide even more tailwinds for housing. 

But even when that happens, it doesn't spell doom for these four companies. There is a huge generational tailwind for housing, as millions of millennials move into the housing market. Today's sell-off could prove an excellent opportunity for long-term investors to buy these companies. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.