A total of eight neighborhoods in Phoenix, Charlotte, Fort Worth and Raleigh saw at least 10 percent of home sales to iBuyers through October 2019, with more neighborhoods knocking on the door, according to a new study released by Redfin.
“The fact that iBuyers have reached over 10 percent market share in some places could be an indication of how big iBuying could get nationwide once the business model is perfected,” Redfin chief economist Daryl Fairweather, said in a statement.
“However, it’s possible that iBuyers are only doing so well in certain neighborhoods because the homes there are largely homogenous – modest, entry-level homes all built around the same time, typically with two or three bedrooms,” Fairweather added. “These factors make it easier to use automated tools to value homes well and resell them quickly.”
The eight neighborhoods where more than 10 percent of homes are being sold to iBuyers. | Photo credit: Redfin
Pecan Creek, in the Phoenix area, is the neighborhood where the highest rate of sales went to iBuyers. Through October, 13.7 percent of sales have gone to iBuyers this year, up from 10.4 percent last year.
“A lot of what’s driving home sellers to accept offers from iBuyers in the Phoenix area is the ability it gives them to move up to another home quickly,” Phoenix Redfin agent Kelly Khalil said, in a statement.
In every single one of the top 10 neighborhoods – other than Forestville in Raleigh, North Carolina – the median sales price of homes sold to an iBuyer was cheaper than that of the neighborhood median sales price.
The release of the neighborhood report comes on the heels of another iBuyer report released by Redfin that found that 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. On a neighborhood level, Knightdale, North Carolina led the way, with 14.8 percent of home sales going to iBuyers in the third quarter of 2019.
The study only looked at data from the top iBuyers from Zillow, Opendoor, Offerpad and Redfin’s own platform, RedfinNow.