Key Highlights
- National iBuyer purchases tanked by -90% nationwide in Q2 2020
- In Phoenix, an iBuying hub, iBuyer purchases dropped from 5.1% of total purchases in January 2020 to 1% of total purchases in June 2020
- ZillowΩffers bought only 86 houses in Q2 and now down to just 440 houses in its total inventory
With COVID-19 lockdowns and fears of having strangers walking in and out of available sale homes, one might think that now would be prime time for iBuyer action. Hassle-free, convenient, time certainty, low-touch home buying and selling iBuying processes sound more than simpatico with a COVID environment., right? Wrong.
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When the pandemic broke out, iBuyers stopped buying houses in efforts to “reassess” local housing markets around the country and to establish new safety/public health protocols. Additionally, iBuyers reneged on standing contracts to, again, “reassess” local market conditions. Entire iBuyer markets shut down and national iBuyer purchases plummeted -90% in Q2 2020, according to Mike DelPrete, a global real estate tech strategist and scholar-in-residence at the University of Colorado Boulder.
To pay the bills, iBuyers, like brokerages, began adding “extra”services to and for their customers. For example, Zillow provided its customers with title and escrow services along with its affiliate lending service called Zillow Home Loans. Opendoor acquired its former partner OS National, a national title and escrow company, and launched Opendoor Home Loans for mortgages. Offerpad unveiled its Real Estate Solutions Center to offer customers multiple selling options including instant selling and/or partnering with Offerpad to list the house on the open market.
Realtor.com, seemingly, has the most selling options via its new Seller’s Marketplace. Seller’s Marketplace offers homeowners side-by-side comparison pricing and processes from various iBuyers and industry servicers. Through realtor.com Seller’s Marketplace, customers can get an instant offer from Opendoor, sell now and move later with EasyKnock, sell-as-is to HomeGo or WeBuyHouses.com or list with an agent on the open market. Zillow, of course, capitalizes on its iBuyer ZillowOffers with its own “built in” branded real estate portal to attract customers.
DelPrete believes that iBuying is the new “starting place” for home sellers just as Zillow’s Zestimate was the starting place pre-COVID. A couple of years ago, if you were going to sell a house, most likely you would have gone to Zillow to get a Zestimate valuation of your house. Today, iBuying is the new Zestimate. Just think about it…If you were considering selling your home today, why wouldn’t you get an instant offer from one or two iBuyers to get a ballpark valuation on your home? Yes, DelPrete believes, “(iBuying) is the new starting point for (today’s) real estate journey.”
And if you’re an agent, broker, or iBuyer that wants to survive in the COVID/post-COVID world that has negatively impacted your bottom line, why wouldn’t you add services real estate customers need such as mortgage lending, title, escrow, moving, repairs, etc.? All you need to offer customers these “extras” is a strong enough balance sheet to float those services in order to “pay the bills.”
Thanks to HousingWire.
Also read: Home Affordability Increasing for Workers, People Ditching Big Cities for Smaller Suburbs & More Space, Home Sales Seen as Only Bright Spot in Economy
