iBuyers picked up more than double the number of purchases than the previous annual high during 2021.
iBuyers Doubled Home Purchases in 2021
According to Zillow’s Q4 iBuyer report, iBuyers purchased 70,402 homes during 2021. This 70,402 is double what iBuyers collectively purchased at its previous annual high of 32,726 in 2019.
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“That’s a big deal, that’s the first time it’s ever cracked 1%,” said Mike DelPrete, recognized expert in the iBuying space. “IBuyers just went crazy in 2021, really put the foot on the accelerator and got to these really big scales.”
The overall market share of iBuyers in their top 38 markets was 1.7% of the market.
iBuyers Sometimes Compared to High-Tech Flippers
Because iBuyers typically offer both sellers and buyers a faster pace of transaction, iBuyers are sometimes compared with high-tech flippers.
IBuyers specialize in offering fast cash offers to sellers based on algorithmic home valuations that are usually off-market transactions. Sellers are given those “take-it-or-leave-it” offers as is with the sellers having no negotiating power to “get a better price.” Once the deal is done, iBuyers do repairs to the house and supposedly sell them quickly on the open market. (Fast turn-around times are essential to iBuying profits.)
One “secret” that iBuyers share is that they often sell their iBuyer purchases to investors off-market in order to expedite volume sales. The now defunct iBuyer sector of Zillow’s overall business did just that when the company decided to liquidate its holdings of some 80,000 iBuyer purchased homes. By the way, Zillow’s iBuying sector was and is not alone in selling large chunks of iBuying holdings…Opendoor, Offerpad, RedfinNow, and other iBuyers unload iBuying purchased holdings exactly the same way…to investors.
Sale Price of iBuying Homes in Q4 2021
According to Zillow’s Q4 iBuying report, iBuyers sold their homes for a median mark-up of 1.1% during Q4 2021. This is the second-lowest margin on record as the median mark-up on iBuyer purchased homes was 8.6% during Q1, Q2, and Q3 of 2021.
Over,all according to Zillow’s report, iBuyers “completed 44,933 home sales last year, exceeding the previous high of 28,265 homes sold in 2019.”
iBuyer Hot Sports via Market Share in Q4 2021
- Raleigh NC – 11%
- Tucson AZ – 9.5%
- Atlanta – 8.9%
- Jacksonville FL – 8.9%
- Phoenix AZ – 8.8%
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Thanks to Zillow and Inman.