This story was republished with permission from the author.
The pandemic of 2020 brought iBuying to a grinding and dramatic halt. The major iBuyers — Zillow, Opendoor and Offerpad — have slowly recovered, with total purchases in Q1 2021 finally rising to the levels of the same period last year.
A few additional observations on the above data:
- Although Opendoor has matched its year-over-year purchase volumes, Q1 2020 was itself an outlier, with a significant slowdown in purchases from Q4 2019.
- On average, Opendoor is still 35 percent below its high-flying 2019 peak.
- Offerpad, soon to go public via a SPAC, is a respectable third player, with purchase volumes of about half of the leaders.
Opendoor was the clear category leader before the pandemic, purchasing more than double the houses per month as Zillow.
The lockdown was the great equalizer: Both companies dropped to near zero and recovered at the same pace throughout 2020. However, in the first quarter of 2021, Opendoor again pulled ahead while Zillow took its foot off the accelerator.
From a sales perspective, all iBuyers are still well below their pre-pandemic highs. Opendoor sold 55 percent fewer houses in Q1 2021 than in the same period a year ago. This decrease is attributable to timing: As the iBuyers purchase more homes and rebuild their inventories, sales will follow.
Individually, the top six iBuyer markets are mirroring the gradual recovery. Phoenix and Atlanta remain the largest markets by volume by a wide margin.
The iBuyers are down but not out. Recovery continues at pace, and the business model is undoubtedly here to stay, but not without its recovery challenges.
Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.