IBuyers have been back in action now for months, after a pause in buying by many — like Redfin, Opendoor and Zillow — at the start of the pandemic. But unlike real estate agents who charged back into business with vigor after shutdowns and stay at home orders, iBuyers continue to be slow to recover in the months since they resumed operations around May and June of 2020, according to data from Redfin.
Top U.S. iBuyers purchased 3,505 homes during the fourth quarter of 2020, a figure down 48 percent year over year, according to MLS and public records data analyzed by Redfin. That number represents 0.3 percent of homes sold across 418 U.S. metro areas tracked by the brokerage during Q4 2020, which is a slight increase from 0.2 percent of all homes sold in Q3 2020, but down from 0.8 percent of all homes sold in Q4 2019.
Redfin noted that one major reason why iBuying is down at the moment is actually because the housing market has been roaring. With widespread low inventory and surging buyer demand, many sellers don’t think they need an iBuyer now, and hope to instead keep more of their home’s proceeds for themselves.
“We’re being very aggressive when it comes to buying homes right now — it’s all gas, no brakes,” Myron Curry, a senior investment specialist at RedfinNow in Los Angeles, said in a statement. “The primary reason iBuyer home purchases remain lower than normal is the lack of homes for sale, but the inventory situation is improving each quarter as we get further away from the worst of the pandemic. People are becoming more comfortable selling their homes as a larger share of the population gets vaccinated.”
Phoenix was the metro area that saw the greatest number of iBuyers during the fourth quarter, at 2.1 percent of all homes sold that quarter. For three consecutive quarters, the metro has led the country in iBuyer purchases. After that, Raleigh, North Carolina (1.9 percent); Atlanta, Georgia (1.6 percent); Charlotte, North Carolina (1.5 percent); and San Antonio, Texas (1.5 percent); saw the next highest number of iBuyer transactions. These figures across all of these metros were up from the previous quarter, but still down year over year.
Compared to the typical homebuyer, iBuyers purchased less expensive homes across all markets Redfin analyzed during the fourth quarter: iBuyers purchased homes at a median price of $284,450, whereas the typical U.S. homebuyer purchased homes at a median price of $318,300.
Still, amid depleted levels of inventory, iBuyers sold homes at a record pace of 14 days within listing. That figure is down from 42 days during Q4 2019 and down from 17 days during Q3 2020 — the quickest pace since at least 2015. In contrast, the typical non-iBuyer home took 30 days to sell during the fourth quarter, down from 46 days the year before and 33 days the quarter before.
“This lightning-fast market has been fueled by a shortage of homes for sale and surging demand due to low mortgage rates,” Curry added. “Our properties are also renovated and move-in ready, which means the process typically moves quickly.”