MReport April 2021

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38 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Tight Inventory Cutting Into iBuyer Options iBuyers are finding it tough to score properties nationwide, as short supply and an increase in equity are factoring into an ever-shrinking market. A ccording to a Redfin analysis, iBuying com- panies bought just 0.3% of U.S. homes that sold in Q 4 of 2020, 3,505 homes total, down 48% from Q 4 of 2019, but an improvement from Q 3's 78% year-over-year decline. Redfin analyzed MLS and pub- lic records data on home purchas- es and sales made by the most well-known national iBuyers, including RedfinNow, Opendoor, Zillow, and Offerpad. Most iBuy- ers put buying on hold at the onset of the coronavirus pandem- ic, amid economic uncertainty, but resumed buying in May and June as housing demand began to rebound, due to record-low rates and a wave of relocations made possible by remote work. However, as sellers gained record equity in Q 4, as CoreLogic recently reported with U.S. home- owners with mortgages seeing their equity rise by 16.2% year- over-year, a gain of $1.5 trillion- plus in equity. iBuyer decline can be attributed to sellers being able to offload their homes without having to share in the profits. Also, short inventory has cut into the total number of properties iBuyers are able to purchase. "We're being very aggressive when it comes to buying homes right now—it's all gas, no brakes," said Myron Curry, a senior in- vestment specialist at RedfinNow in the Los Angeles area. "The primary reason iBuyer home pur- chases remain lower than normal is the lack of homes for sale, but the inventory situation is improv- ing each quarter as we get further away from the worst of the pan- demic. People are becoming more comfortable selling their homes as a larger share of the population gets vaccinated." Leading the charge was the Phoenix metro, with iBuyers pur- chasing 2.1% of the homes available during Q 4—the largest market share for the third quarter in a row. Coming in at a close second was Raleigh, N.C. at 1.9%, and Atlanta at 1.6%. Charlotte, N.C. and San Antonio, Texas rounded out the top five, both at 1.5% share each. Each of these markets saw an increase in market share from the prior quarter, but a decrease from 2019. Nationally, the typical iBuyer- owned home found a buyer after being listed on the market for 14 days—the quickest pace since at least 2015, when Redfin began re- cording iBuyer data—down from 42 days a year earlier and a re- vised 17 days in Q 3. By compari- son, the typical non-iBuyer home spent 30 days on the market, down from 46 days a year earlier and 33 days in Q 3. "Most homes that RedfinNow puts on the market in Los Angeles are selling within the first week and getting multiple offers," Curry said. "This light- ning-fast market has been fueled by a shortage of homes for sale and surging demand due to low mortgage rates. Our properties are also renovated and move-in ready, which means the process typically moves quickly." Redfin recently reported that a record 43% of homes for sale spent just a week or less on the market. In a majority of the top 27 iBuying markets, iBuyers sold their inventory faster than the typical homeowner, with the largest margins in Austin (29 days faster); Riverside, California (28 days faster); and Raleigh, North Carolina (27 days faster). Minneapolis; Tampa, Florida; and San Diego were the only metros where iBuyers took longer to sell homes.

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