While iBuyers have kept the wheels turning in the first three months of 2022, headwinds in the housing market appear to be straining prominent players’ in other aspects of their businesses. That’s evident as recent Zillow data show that fewer homeowners opted to sell their homes to the tech-driven instant buyers last quarter.
According to the report, homeowners sold 12,652 homes in Q1 using one of three iBuying services included in this analysis—Opendoor, Offerpad and Zillow Offers. That translates to about a 42% decline from the fourth quarter of 2021, which saw 21,845 homeowners sell their homes to iBuyer.
Despite the decline in purchases, iBuyers didn’t have any trouble selling the homes they already had. Zillow’s report shows that the tech companies resold 26,537 homes in Q1 2022, up from 21,332 in Q4 2021.
Key findings:
- In Q1, homeowners sold 12,652 homes using an iBuying service.
- The iBuyer market share was 1.3%, down from 1.7% in the previous quarter.
- iBuyers resold 26,537 homes in Q1.
- The median markup for homes resold by iBuyers during the quarter was 14%— the highest figure on record.
- Homeowners in Atlanta, Phoenix, Dallas–Fort Worth, Houston and Charlotte sold the most homes using an iBuying service in Q1.
The takeaway:
“The decline in sales using an iBuying service and iBuyer market share is primarily due to two factors: the winding down of Zillow Offers and an overall slowdown in home sales in the broader market, largely because of record-low inventory,” read the report. “Zillow data shows U.S. home sales fell 21% quarter over quarter in Q1.”
The median price of homes sold using an iBuying service fell by 5% to $347,000 in Q1 compared to $364,900 in the final quarter of 2021. According to experts, this comes as the overall median price of homes grew by 2%.
“The median price of homes sold using an iBuying service consistently outpaces the national median sale price because iBuyers tend to operate in larger, more expensive housing markets, not because homes sold using an iBuyer are more expensive than a typical home in each market,” the report reads. “Of the 32 metro areas for which data is available, the typical home sold using an iBuying service was less expensive than the metro’s overall median sale price in 30 of those markets.”
“Sun Belt markets continue to see the most iBuyer activity. Atlanta was the top market for homes sold using an iBuying service in Q1, followed by Phoenix and Dallas–Fort Worth,” according to the report.
