“Instant Buyer” Market Continues Slow Recovery, with Decline in Home Purchases Narrowing to 48% In the Fourth Quarter
The nation’s top iBuying (short for instant buyer) companies purchased 3,505 homes in the fourth quarter of 2020, down 48% from a year earlier, according to a new report from real estate brokerage Redfin.
That represents 0.3% of homes that sold across the 418 U.S. metropolitan areas tracked by Redfin in the fourth quarter, down from 0.8% a year earlier but up slightly from 0.2% in the third quarter of 2020.
Redfin analyzed MLS and public records data on home purchases and sales made by the most well-known national iBuyers, including RedfinNow (Redfin’s iBuying business), Opendoor, Zillow and Offerpad for the report. The fourth quarter is the most recent period for which iBuyer data is available.
The term “iBuyer” (short for instant buyer) is used to describe real estate companies that purchase houses from homeowners in quick cash transactions by using algorithms to evaluate a property’s worth based on comparable market data.
Real estate firms including Redfin, Zillow and Opendoor put iBuying on hold at the onset of the coronavirus pandemic amid substantial economic uncertainty.
These companies resumed their iBuying businesses in May and June as housing demand began to rebound thanks to record-low mortgage rates and a wave of relocations made possible by remote work.
Still, business remains slower than usual, in part because the housing market is so hot. With homebuyer demand through the roof, many sellers figure they can offload their homes without having to share the profits.
Plus, an intense shortage of homes for sale means there aren’t as many properties for iBuyers to purchase in the first place.
Find out more at www.redfin.com
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