A new analysis of MLS data and public records by Redfin researchers shows that iBuyers are surging back into the real estate market in the industry’s core metro areas after putting operations on pause thanks to the pandemic.
The major iBuyer companies and services – Opendoor, Zillow Offers, Offerpad, RedfinNow and Bungalo – bought 4,383 homes in the first quarter of 2021, Redfin’s economics team reported, up from 1,798 in the third quarter of 2020 and a low of 825 during the second quarter of that year, when the COVID-19 pandemic was at its height.
On a year-over-year basis, the first quarter of 2021 figure is down only 6.1 percent form the first quarter of 2020.
iBuyers bought a record high number of 8,310 homes in the third quarter of 2019.
In the top markets for iBuyers, which stands for “instant buyer,” the services together account for between 2.2 percent (Phoenix, Arizona) and 2.9 percent (Raleigh, North Carolina) of the for-sale housing market. The nationwide median price of a home bought by an iBuyer was $302,050, around $18,000 less than the nationwide median sale price of $320,000.
And even as the nation’s housing markets have moved at faster and faster paces since early COVID-19 lockdowns lifted last spring and summer, iBuyers are moving faster, with a median of 13 days between putting a home on the market an putting it under contract.
iBuyers also appear to be offering buyers’ agents lower commissions – an average commission of 2.43 percent in sales by iBuyers in the first quarter, compared to the average nationwide commission of 2.66 percent. It appears that many iBuyers are lowering these commission payments as part of a cost-savings strategy, Redfin researchers said, citing the 2.66 percent average commission paid by iBuyers in the first quarter of 2020.
The report comes as the Greater Boston real estate market sees its first national iBuyer join the fray: RedfinNow began making offers in Greater Boston in April. Despite the widespread belief that New England’s widely varied housing stock makes it too hard for an iBuyer to work, Opendoor also highlighted the market in an investor presentation last year as a future target of expansion.
