ATLANTA, GEORGIA — Sitting in a car in Atlanta, you’ll probably hear an ad on the radio for at least one real estate tech company.
Knock, Opendoor, Offerpad and Zillow Instant Offers are all fine-tuning their technology that buys and sells homes online in the city. Each company — known as iBuyers — operates in a handful of cities while strategizing expansion across the country. Along with Phoenix, Atlanta is the city that sees the most crossover among the crop.
“There’s a ton of volume, it’s a large market, it’s growing quickly. It has a diverse set of industries so that it’s not really as negatively impacted by a downturn. If there’s one or two industries that suffer, there’s still 10 other industries that are thriving,” Knock Head of New Markets Allan Ziegler said.
“When building anything new, you want to have stability because what you’re building is going to be variable.”
Knock is operationally headquartered in Atlanta, while its competitors mostly just buy and sell homes in the city. Offerpad is headquartered in the other popular city for iBuyers, Phoenix.
Opendoor is building an engineering team in Atlanta that will rival the San Francisco startup’s Silicon Valley operations. And Zillow is only in the early stages of expanding to Atlanta, set to start buying and selling homes in the city this fall.
“Atlanta is a well-located city with a great airport, a diverse economy. We have a lot of Fortune 10 companies, and it makes us resilient in downturns. It also means that there’s a lot of job growth. There are some great universities that feed talent,” Opendoor East Coast General Manager David Zanaty said.
“All of that combines in a city without barriers to entry. Unlike some coastal cities where you have water or mountain features that will keep you from growing, we’re able to grow out and so that keeps the cost of living very affordable.”
Real estate agents in Atlanta understand why their city is such a draw for real estate startups.
“It’s got to be the growth,” said Chris Lazarus, a broker at Sellect Realty outside Atlanta. “Atlanta is one of the fastest-growing cities in the country, and it’s the No. 1 filming location in the world, surpassing Los Angeles. We’re still vying for Amazon HQ2 — everywhere you look there’s growth.”
Lazarus said he’s lost one client to Opendoor, someone in property management who sold to the $2-billion-plus startup instead of selling through Sellect. Lazarus said he thought the property could have sold for $35,000 to $45,000 more than what Opendoor paid for it.
Agents at Lazarus’ brokerage have worked transactions representing buyers with Opendoor as the seller, too. But Lazarus said he’s not worried and thinks Opendoor and its competitors will only cut into wholesale clients who were already willing to sell for less.
“Our agents have done deals with Opendoor on the buy side,” Lazarus said. “It was really smooth. It’s a very efficient machine they’re running.”
The other cities where these startups are testing the waters — Las Vegas, Raleigh-Durham and Orlando among them — aren’t feeling these companies’ presence quite as much without as much crossover, corporate offices and marketing.
Sam Weintraub, a Knock customer who sold his home through the startup and bought his family’s new home through its home trade-up program, said he’d received mailings from several of the Atlanta iBuyers.
The hot but affordable real estate market, its potential for growth and geographical factors like airport access and no mountain ranges all make Atlanta appealing. As the venture capital money pours in and each iBuyer continues to expand, some other markets may become more like Atlanta with every real estate tech startup competing in the city.
But for now, Atlanta’s the one where consumers are deciding who will come out on top.