The increase in iBuying activity during 2021 was due, according to CoreLogic, to a combination of increased demand for owner-occupied and second homes since the onslaught of the COVID pandemic AND increased demand by investors.
Reciprocal “Arrangement” Among iBuyers and Investors Doubled in 2021
Despite iBuying opportunities being a reality in multiple parts of the country since 2015, both investors and iBuyers alike eye-balled each other during 2021. Investors bought twice as many homes from iBuyers in 2021 as they did in 2019 AND iBuyers resold 22% of their home purchases to investors in 2021, up from 5% of their purchases in 2019, according to CoreLogic.
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Top Four iBuyers Account for 95% of All iBuying Purchases Since 2017
Opendoor, Zillow, Offerpad and Redfin represent over 95% of all iBuyerpurchases since 2017.
All four of these iBuying companies jacked up their purchasing activity in 2021. Zillow, prior to closing its iBuying operations at the end of 2021, increased its purchases by a whopping +222% during the first three quarters of 2021 compared to 2019.
Opendoor represents the largest share of overall iBuying purchases since 2017. Opendoor’s inventory now accounts for approximately 56% of all iBuyer home purchases. Zillow, while it was still running its iBuying program, ranks second to Opendoor by accounting for about 24% of iBuying inventory. Offerpad about 18% of purchases and Redfin has approximately 2% of iBuying inventory.
Geography of iBuying
States that have been seeing the largest population gains see the largest concentrations of iBuying activity.
The five states that make up 75% of iBuyer purchases since 2017 include the following:
- Texas – 22%
- Arizona – 20%
- Florida – 12%
- Georgia – 13%
- North Carolina – 10%
Recently, the ramped level of iBuying in California has taken over the level in North Carolina.
Ten metros found primarily in these five states account for 76% of iBuyingactivity. These metros include:
- Phoenix AZ – 20% overall with 6% of purchases in Q1, Q2, and Q3 2021
- Atlanta GA – 14% overall with 5% of purchases in 2021
- Dallas TX – 10%
- Charlotte NC – 6%
- Las Vegas NV – 6%
- Houston TX – 5%
- Raleigh NC – 4%
- Orlando FL – 4%
- Tampa – 4%
- San Antonio TX – 3%
Just remember that while iBuying sales transactions represent about 1% of the national home market, 5% to 6% of overall home purchases in places such as Phoenix and Atlanta are iBuying transactions. The impact of these transactions on prices and inventory, particularly since 1-in-5 iBuyer purchase are resold to investors, could be profound.
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Thanks to CoreLogic.
