iBuying appears to be back, after the nation’s top iBuying companies purchased 4,383 homes in the first quarter of 2021 — up 20.6% from the prior quarter.
Per a recent report from Redfin, the typical iBuyer-owned home found a buyer after 13 days on the market — the quickest pace since at least 2015, when Redfin began recording iBuyer data.
The top quarter of iBuyer activity remains the third quarter of 2019 when, according to Redfin, 8,310 homes were bought via iBuyers. That number then steadily dropped, bottoming out at 825 in the second quarter of 2020 after COVID-19 was officially declared a pandemic.
But iBuying companies resumed business in full in May and June of 2020 as housing demand began to rebound, thanks to record-low mortgage rates and a wave of relocations made possible by remote work. Now, the numbers are finally trending upwards, said Allister Booth, a Los Angeles-based acquisitions specialist at RedfinNow.
“Business really started ramping up in January and February,” she said. “Since then, we’ve just had a constant barrage of deals. We’re back to full speed and are buying more homes than we were last year. After we buy and renovate those homes, we know we’ll be able to sell them because there are so many more buyers in the market right now than there are homes available.”
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iBuyer giants Redfin, Offerpad and Opendoor made headlines at the end of the first quarter, with Offerpad going public and Redfin and Opendoor expanding into a plethora of new markets. Offerpad was bought by a Spencer Rascoff-controlled special purpose acquisition company, named Supernova Partners Acquisition Company. The company also received a $200 million commitment from private equity investors BlackRock and Zimmer Partners.
Opendoor went public in October after announcing a merger with Social Capital Hedosophia Holdings Corp.
iBuyers bought homes for a median of $302,050 in the first quarter. By comparison, the median purchase price for the typical American homebuyer was $320,000. The typical, non-iBuyer home in the market spent 31 days on the market in the first quarter.
North Carolina markets topped the list of hot iBuyer markets in the first quarter. iBuyers purchased 2.9% of the homes sold in Raleigh during the first quarter — a larger share than any other top iBuyer market — followed by 2.7% in Charlotte and 2.6% in Durham. iBuyers also sold their inventory faster in North Carolina (an average of 30 days quicker than other states) than in any other state during the first quarter.
Austin, Texas and Sacramento, California, were the metros where iBuyer homes flew off the market quickest — an average of only seven days each. Homes in Phoenix and Portland, Oregon, averaged only eight days on the market, and homes in Durham averaged only nine days on the market.
Portland’s quick iBuyer-home turnaround is noteworthy, since the median price of iBuyer homes in the metro averaged $440,000 — the second-highest median iBuyer-priced metro in Redfin’s report.