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iBuying Returning to Pre-Pandemic Levels

It rose 21% quarter-to-quarter nationally, though down 6.1% year-to-year. In three Fla. cities noted in the study, about 1 out of 100 sales go to iBuyers.

SAN FRANCISCO – After pausing business during early in the pandemic, iBuyer activity is starting to catch up with levels they enjoyed prior to the pandemic, a new report finds – though not in significant enough numbers to greatly impact local markets.

In the first quarter of this year, the nation’s leading iBuying firms purchased 4,383 homes, nearly 21% higher than in the previous quarter. The 1Q numbers are still down 6.1% year-to-year, however, according to a new report released from Redfin measuring iBuying business.

In three Florida cities cited in the study, however, the iBuying numbers are a bit higher:

  • Jacksonville: Down 1% year to year, 1.3% of all home sales
  • Lakeland: Up 290.0% year to year, 1% of all home sales
  • Orlando: Down 15% year to year, 1.3% of all home sales

iBuyers are usually real estate companies that purchase houses from homeowners in quick cash transactions. In exchange for a quick close, cash sale, flexible move-out dates and no seller obligation to make repairs, an iBuyer generally charges a higher fee than a traditional real estate agent. Large iBuying firms include Opendoor, Redfin, Zillow and Offerpad, among others.

iBuyers comprise a small part of the overall housing market. Nationally, it’s just 0.5% of home sales, according to Redfin’s report.

“Business really started ramping up in January and February,” says Allister Booth, an acquisitions specialist at RedfinNow in Los Angeles. “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.”

iBuyers tend to purchase homes for less than the metro area’s median price – a median of $302,050 in the first quarter.

The top markets for iBuying activity lately, according to Redfin’s report, are Raleigh, N.C. (iBuyers purchased 2.9% of homes that sold during the first quarter); Charlotte, N.C. (2.7%); Durham, N.C. (2.6%); San Antonio, Texas (2.6%); Tucson, Ariz. (2.3%); and Phoenix (2.2%).

Source: “iBuyer Home Purchases Inch Back Toward Pre-Pandemic Levels,” Redfin (June 25, 2021)

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