The second quarter was a tough one on iBuyers, as only 0.1% of the homes sold across 418 metros — only 880 homes total — were purchased by top iBuyers Redfin, Zillow, Opendoor and Offerpad, according to a report by Redfin.
That’s a drop of 88% compared to Q2 last year. It also represents the smallest number of properties purchased by iBuyers since Q1 2017, Redfin said, with iBuyers spending $195 million in Q2, compared to $1.6 billion Q2 2019. Redfin’s report is based on analysis of MLS and public records data.
During shut-down orders, Zillow canceled contracts on homes and Opendoor pulled offers and layed off 35% of its staff. Redfin furloughed 41% of its agents.
Phoenix had the most significant slump in the iBuyer market share in Q2. iBuyers there acquired 0.8% of homes that sold, down 3.3 percentage points from Q2 2019.
Behind Phoenix is Raleigh, North Carolina, and Las Vegas, which fell 2.9 and 2.7 percentage points, respectively.
Of the homes purchased in Q2, iBuyers bought them at a median-price of $241,100, down from $250,000 last year.
In all but one market, iBuyers purchased the homes for less than the metro-area median price. That outlier is Riverside, California, where the median purchase price was $400,000, about $6,000 higher than the metro area sale price, Redfin said.
Homes on the market in Q2 were bought by iBuyers after being listed for a median of 13 days, down significantly from 40 days last year. The average non-iBuyer home spent 37 days on the market, which Redfin said is unchanged from last year.
“One trend that has ramped up since the pandemic began is the iBuyer bidding war,” Jason Aleem, vice president of RedfinNow said in the report. “Homeowners are seeking out offers from multiple iBuyers so they can feel confident they are getting the best possible price in this blazing hot market without a bunch of foot traffic coming through. As a result, iBuyers are making more competitive offers.”
Some solutions iBuyers implemented to bring back customers during Q2 include virtual home tours, 3D home tours and virtual signing practices.
