Direct-to-consumer homebuying and selling platforms known as iBuyers are beginning to account for an increasing percentage of market share, a new survey from Seattle-based real estate brokerage Redfin found.
In total, 3.1 percent of homes sold in the third quarter went to iBuyers in 18 U.S. markets, up from 1.6 percent a year earlier.
“IBuyers are concentrating their efforts in southern markets where both home sales and prices are poised for strong growth,” Redfin Chief Economist Daryl Fairweather said in a statement. “We think that iBuyers are likely to accelerate home sales in these markets. Homeowners who may have been reluctant to sell because they didn’t want to deal with the hassle may be persuaded by the convenience of an iBuyer sale.”
The marketshare of homes sold to iBuyers. | Photo credit: Redfin
Raleigh, North Carolina, unseated Phoenix as the top market for iBuyer sales. In Raleigh, 6.8 percent of sales went to iBuyers, up from 3.8 percent a year ago. Houston saw the biggest overall jump, with 3.8 percent of sales going to iBuyers, versus 0.1 percent in the third quarter of 2018.
Homes owned by iBuyers are also, on average, selling for less, according to the study. IBuyer-owned homes sold for 20 percent or more below the local median price in Austin, Nashville, Charlotte, San Antonio and Atlanta.
They’re also staying on the market for a fewer amount of days. Homes sold by iBuyers spent less time on market than others in 13 of the 18 tracked metros, in part because of aggressive marketing and incentive strategies and also because they are designed to sell quickly with features like on-demand viewing, Redfin agent Heather Mahmood-Corley said.
“The homes iBuyers are selling are definitely attractive to many homebuyers since they’re vacant and can be viewed any time,” Mahmood-Corley said in a statement.
“iBuyers listing their homes for sale in Phoenix are starting to sweeten the pot with incentives like homebuyer credits – sometimes as high as $4,000 – for people who go without a buyer’s agent and use the iBuyer’s preferred mortgage and title companies,” Mahmood-Corley, added. “However, even with the lure of extra incentives, most homebuyers prefer to have the guidance of an agent to help them through their purchase.”
The study only looked at data from the top iBuyers from Zillow, Opendoor, Offerpad and Redfin’s own platform, RedfinNow.
