More Homes Going to iBuyers – But Numbers Still Low
Overall, the iBuyer segment has returned to its pre-pandemic levels. However, the instant home-sale numbers are still less than 2% even in Fla.’s biggest iBuyer markets.
SEATTLE – iBuyer purchases have returned to pre-pandemic levels, but they still aren’t a major player in the overall homebuying market.
The homes iBuyers purchase are less expensive than the typical purchase, but they’re selling their housing inventories in 13 days, a record pace, according to a new report looking at the state of iBuying conducted by Redfin.
iBuyers make instant cash offers to home sellers who want to avoid listing the home on the market publicly. Sellers have many reasons to choose an iBuyer, but it’s often a matter of convenience since they don’t have to prepare the property for showings. Companies like Opendoor and Offerpad offer iBuyer services, but so do some real estate brokerages like Keller Williams, Coldwell Banker and Redfin.
iBuyer “business really started ramping up in January and February,” says Allister Booth, an acquisitions specialist at RedfinNow in Los Angeles. “Since then, we’ve just had a constant barrage of deals. We’re back to full speed and are buying more homes than we were last year. After we buy and renovate those homes, we know we’ll be able to sell them because there are so many more buyers in the market right now than there are homes available.”
Still, iBuyers make up a small portion of the home sales. They purchased just 0.5% of homes (4,383 homes) that sold across 418 metro areas in the first quarter. iBuyer purchases, however, have increased 20.6% in the first quarter compared to the prior quarter.
iBuyers active in some Florida markets
The report includes three Florida metros noted for a higher percentage of iBuyer transactions. Still, even in the top two cities, only slightly more than one in 100 transactions involved iBuyers:
- Jacksonville: iBuyer sales dropped 1.0% year-to-year, with iBuyers making up 1.3% of the market. The median iBuyer sales price is $246,400 compared to the metro overall median of $267,950. Homes relisted spend a median 15 days on the market compared to the overall median of 32 days.
- Lakeland: iBuyer sales rose 290.0% year-to-year, though they still only make up 1.0% of the current market. The median iBuyer sale prices is $220,800; the median for the market is $240,000. An iBuyer home spends a median 22 days on the market – more than the metro overall median of 18 days.
- Orlando: iBuying is down 15.0% year-to-year, and the instant cash offers make up 1.3% of the total market. The median price paid by iBuyers is $272,100 compared to the overall median of $296,000. iBuyer homes spend a median 16 days on the market compared to an overall median of 19 days on the market.
The top iBuyer markets are Raleigh, N.C. (2.9% of homes sold during the first quarter) and Charlotte, N.C. (2.7% of sales). Other market leaders for iBuyer sales are in Durham, N.C. (2.6%); San Antonio, Texas (2.6%); Tucson, Ariz. (2.3%); and Phoenix (2.2%).
Nationwide, the median dollar amount for iBuyers’ first-quarter purchases was $302,050, while the median purchase for a typical American homebuyer was $320,000.
Source: “iBuyer Home Purchases Inch Back Toward Pre-Pandemic Levels,” Redfin (June 25, 2021)
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