One in five homes resold by iBuyers Zillow, Opendoor and Offerpad in 2021 ended up being flipped to institutional investors and other private entities, “a secret pipeline” with the potential to exacerbate inventory shortages in markets where iBuyers are active, according to a Bloomberg analysis.

Bloomberg’s analysis of 100,000 property records compiled by Attom Data Solutions found that iBuyers were 60 percent more likely to flip homes to investors in predominantly non-white areas, with thousands of homes sold to landlords backed by KKR & Co., Cerberus Capital Management, Blackstone Inc., and other private ventures.

In one “hot spot within a hot spot” — McDonough, Georgia — Bloomberg found that 70 percent of homes flipped by iBuyers were resold to investors, many without being listed. Located 30 miles southeast of Atlanta, McDonough is two-thirds African American.

“These companies go around saying, ‘We’re going to help mom and pop and inject liquidity into the market,’” Inman contributor Mike DelPrete told Bloomberg. “They don’t say, ‘We’re going to suck up houses from the ordinary market and sell them to Wall Street.’ ”

Although Zillow announced in November that it was closing down its iBuying service, Zillow Offers, it’s still in the process of selling off homes it acquired.

Zillow spokesman Viet Shelton told Bloomberg it’s common for iBuyers to sell homes through “varied sales channels” including families, small investors and institutional landlords and nonprofits.

An Offerpad spokesperson told Bloomberg its sells most of the homes that it buys to individuals, but the company has “a diverse mix of customers that benefit from the ease and simplicity of our services,” and that “where investors choose to do business is a function of their strategy.”

Offerpad, which went public last fall with a $2.7 billion valuation, is seeking to take on more than $600 million in additional debt to buy more homes as it expands into new markets.

Opendoor — the leader in the category, with 15,181 homes bought and 5,988 sold during the third quarter — is also taking on hundreds of millions in debt to fuel growth.

Investors bought 18 percent of U.S. home sold during the third quarter — the highest share in records going back 20 years, Bloomberg reported, citing research by Redfin Corp., which has also dipped its toe into iBuying.

But iBuyers say that they’re still relatively small players in terms of overall market share, and shouldn’t be blamed for the remarkable runup in home prices during the pandemic. An analysis by Zillow concluded that during the second quarter, iBuyers collectively accounted for 1 percent of the U.S. home sales market.

Bloomberg pulled deed records from a national database of iBuyer transactions compiled by Attom Data Solutions and matched records where the seller’s name corresponded with an entity used by Offerpad, Opendoor or Zillow. Buyers whose names didn’t appear to be a person or a family or living trust were categorized as an investor or “other entity.”

Email Matt Carter

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription