Despite the advancements in technology throughout the past several decades, the process of purchasing a home remains quite antiquated and riddled with friction.
The process is often drawn out and tedious. iBuying is changing that.
Data from iBuyerStats shows that the number of homes for sale from the top three leading iBuyers – Zillow, OpenDoor, and OfferPad – is up 701% when compared to March of 2021.
Existing home sales in 2020 totaled well over $1.6 trillion, indicating a large opportunity ahead. The digitalization of residential real estate transactions has large implications and can remove many friction points, improving the buyer and seller experience.
Today, major friction points for both buyers and sellers includes obtaining mortgage approval, high commissions, tedious contracts, and too many parties involved. Survey data shows that over 76% would be willing to compromise on price to alleviate the experience. With iBuyers ultimately acting as market makers in a historically illiquid market, liquidity could reach new heights.
OpenDoor is the largest, with the most listings in 72% of zip codes and over $1.5 billion in inventory value. On the other hand, Zillow has built out a consumer franchise around residential real estate with over 240 million monthly site users and is moving quickly. It’s interesting to think of which of the iBuyers are well positioned to capitalize on the opportunity, and how the industry will evolve in the coming years.
The author or his firm may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.