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Homeowners sold a record number of homes using an instant buying service in Q2, offering some relief for home shoppers as these homes are listed to be sold on the open market
- Market share for iBuyers reached 1% of all U.S. home purchases for the first time last quarter, as homeowners used an iBuying service to sell more than 15,000 homes in Q2.
- Eighty-four percent of homes sold to one of the four largest iBuyers last quarter were not listed for sale beforehand, adding net-new inventory to the housing market when the iBuyers list them for sale.
- Homeowners in Atlanta, Phoenix and Dallas sold the most homes using an iBuyer service in Q2.
SEATTLE, Sept. 7, 2021 /PRNewswire/ -- iBuyers are poised to sell a record number of homes in the third quarter of 2021 after setting an all-time high for home purchases in Q2, a new Zillow® analysis shows.
Zillow's analysis examines the purchases and sales of the four largest U.S. instant buyers — including Zillow Offers — in 33 markets across the country, starting in 2018. Instant buyers, commonly known as iBuyers, are home buying and selling services that typically buy off-market homes directly from sellers at market rate and quickly list them for sale on the open market after making light repairs and updates.
"The growing number of homeowners using an iBuyer service clearly demonstrates that sellers desire an easier way to sell their homes, with more certainty and less stress, even in a hot sellers market," said Zillow Chief Operating Officer Jeremy Wacksman. "iBuyers remove some of the traditional home selling pain points, unsticking homeowners previously put off by the hassles of selling a home or worried about timing their next purchase. This brings net-new inventory to the market, mainly at an affordable price point near the middle of the market, adding liquidity to the market that has traditionally been difficult for consumers to navigate."
iBuyers — unlike some other real estate companies that acquire homes to hold or rent out — make light repairs on the homes they purchase and then quickly resell those homes on the open market. Rather than taking homes off the market or investing in large remodels to significantly increase the value of a home, iBuyers act as a connection point between sellers and the eventual buyers. In Q2, 83.6% of homes sold to one of the four largest iBuyers — Zillow Offers, Opendoor, RedfinNow and Offerpad — had not been previously listed for sale on the open market, adding liquidity to the market.
Homeowners used an iBuying service to sell more than 15,000 homes in Q2 for a total of nearly $5.3 billion. That's up from about 7,000 homes sold through an iBuyer for $2.1 billion in Q1, and breaks the previous quarterly record of about 10,400 homes for almost $2.8 billion in Q3 2019. Market share for iBuyers in Q2 reached 1% of all U.S. home sales for the first time.
The record number of homes sold using an iBuying service last quarter means it's likely the number of homes listed on the open market and sold by iBuyers to consumers will increase accordingly. iBuyers typically held homes they sold in Q2 for 64 days, which included getting the home ready to sell, time the home spent on the market and time to close.
The record-breaking quarter came during perhaps the strongest sellers market in recent memory. Homes often went pending within a week of being listed on the market and more than a third sold above list price. Even amid a market that is largely advantageous to sellers, this analysis shows the convenience, certainty and control offered when selling with an iBuyer are still valued, and may even be preferable when trying to time the purchase of their next home in a competitive market.
The metro areas with the most home sales using an iBuying service in Q2 were Atlanta, Phoenix and Dallas. iBuyers had a market share of 5% or more in Phoenix, Charlotte and Atlanta.
iBuyers tend to buy and sell homes near the median sale price in a given metro area, adding liquidity for relatively affordable homes that are often in high demand. In 23 of the 33 largest iBuyer markets, the median price for homes iBuyers purchased was within 10% of the market's overall median sale price. The national median price of a home sold to an iBuyer was 3.6% higher than the overall U.S. median sale price, likely because iBuyers tend to operate in larger, more expensive markets.
The overall median sale price in top iBuyer markets typically grew 9.1% from Q1. Amid this rapid rate of home price appreciation, the homes that iBuyers sold during Q2 typically went for 9.6% more than the purchase price.
Total iBuyer Purchases
iBuyer Market Share
Dallas–Fort Worth, TX
Las Vegas, NV
San Antonio, TX
Los Angeles–Long Beach–Anaheim, CA
Minneapolis–St. Paul, MN
San Diego, CA
Daytona Beach, FL
North Port–Sarasota-Bradenton, FL
Miami–Fort Lauderdale, FL
Colorado Springs, CO
Fort Collins, CO
*Includes all markets where iBuyers purchased more than 30 homes in Q2 2021. Table is ordered by the number of iBuyer purchases.
This analysis tracks home purchases and sales by the four largest iBuyers: Zillow Offers, Opendoor, Offerpad and RedfinNow. Other iBuyers were excluded because of low transaction counts. iBuyer transactions were identified using a combination of public records, Zillow's own data and proprietary datasets from outside of Zillow. Through this combination of Zillow data and public data, we are able to capture an accurate and timely picture of the iBuyer market.
National figures cited throughout the report include all U.S. transactions. The metro-by-metro table includes only the 33 metro areas with more than 30 homes sold using an iBuyer service in Q2. Market shares are calculated by dividing total iBuyer purchases by an adjusted version of Zillow's headline sales metric that includes nontraditional transactions like those done by iBuyers and other business entities. Other statistics in this report are calculated only when there is sufficient data to provide an accurate statistic.
About Zillow Group:
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter.
As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers® buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans™, our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions.
Zillow Group's brands, affiliates and subsidiaries include Zillow®; Zillow Offers®; Zillow Premier Agent®; Zillow Home Loans™; Zillow Closing Services™; Zillow Homes, Inc.; Trulia®; Out East®; StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).