Both iBuyers and Power Buyers are seeing explosive growth. Plus, zavvie suggests that ZillowOffers’ demise does not mirror weaknesses in the iBuying model.
Power Buyers and iBuyers Saw Huge Growth in Home Purchases from Q2 2021 to Q3 2021
A recently released report by the real estate tech startup zavvie tells us that so-called Power Buyers and iBuyers experienced enormous growth in Q3 2021. Home buying consumers were attracted to and used companies that provide such services as cash-backing for purchase offers, home leaseback options and buy-before you-sell tools, particularly “in smaller markets where the national iBuyers aren’t present.”
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Take a look at some 2021growth results for Power Buying companies:
- Easy Knock, a company that buys homes and then leases them back to the original owners, experienced double the business growth in Q3 that it had achieved in Q1 2021
- Knock, a home swap pioneer, established operations in 69 markets in 14 states, an increase from three markets by the end of 2019
- Ribbon experienced a ten-fold uptick in its demand in 2021
According to zavvie, “cash offers drive power buyers growth.”
iBuyer purchases increased an eye-popping +46% from Q2 to Q3. Zavviie’s reported stated,” Without question, this was a breakthrough quarter in terms of iBuyer purchase volumes.”
iBuyers, formerly questioned about paying above market value, trimmed their offers during Q3. Rather than paying an average of 104.1% market value in Q2, they paid an average of 103.1% market value in Q3. In September, iBuyer offers dropped to an average of 100.6% of a home’s market value.
Additionally, as iBuyer market value payment fell, their median purchase price increased over 2021. iBuyers’ median purchase price, according to zavvie, “increased from $280K in Q4 2020 to $431K in Q3 2021, a whopping +47% gain.”
Zavvie Report on iBuyers and Power Buyers Growth Results Reflects Different Outcomes from ZillowOffers
Zavvie co-founder and Chief Data Officer Stefan Peterson said, “…paraphrasing Mark Twain the reports of thedeath of iBuying by some have been greatly exaggerated.”
Peterson’s conclusions about the viability of iBuying are similar to those of real estate analyst Mike DelPrete.
DelPrete was quoted at the time of ZillowOffers’ demise that “…for the time being, iBuyers have never been bigger.”
Peterson’s conclusions about iBuying also point to the parent company Zillow itself for the downfall of ZillowOffers. Zavvie’s report states, “It’s clear that Zillow’s decision was completely attributable to internal factors specific to Zillow rather than to any lack of consumer demand.”
Thanks to Inman.