The term "iBuyer" (short for instant buyer) is used to describe real estate companies that use technology and AI to make instant offers to home sellers and then purchase homes in quick, cash transactions. iBuyers charge sellers a higher fee than a traditional real estate agent would for the convenience of avoiding home prep, showings and open houses and the certainty of a cash offer with a flexible move out day. These companies then make any necessary improvements and resell the homes to homebuyers.
While iBuying represents a sliver of overall
In raw numbers, instant offer companies purchased the largest number of homes in
"It's no surprise
Fairweather also predicts the metros seeing strong iBuyer activity will also see growth in home sales.
"It's a seller's market right now, but this can be a double-edged sword for sellers who also are looking to buy. iBuyers are a big help for folks who need the equity from their current home to buy the next and want the flexibility of lining up their sale with the purchase of their new home. Homeowners who may have been reluctant to sell because they were concerned about carrying two mortgages or worried about the stress of choreographing two transactions may be persuaded by the convenience of an iBuyer sale."
iBuyers had the highest year-over-year growth in market share in
Fourth Quarter 2019 Highlights
Raleighled the nation in iBuyer market share for the third consecutive quarter. Raleigh(7.9%), Durham(6.2%), Atlanta(5.8%), Phoenix(5.7%) and Charlotte(5.2%) all exceeded 5% market share in the fourth quarter.
- iBuyer market share grew the most year-over-year in
Tucson, where iBuyers bought 3.1% of the homes in the fourth quarter of 2019, up from zero purchases a year prior. Denversaw the second-largest increase, up to 2.7% from just 0.4% a year prior.
- Market share fell year-over-year in
Las Vegas(-3.4%), Phoenix(-1.2%) and Orlando(-1.0%).
- The most expensive markets for iBuyer purchases were
Riverside, CA, Denverand Portland, OR, where iBuyers bought homes for a median of $403,500, $371,000and $367,000respectively.
- The most affordable markets for iBuyer purchases were
Jacksonville, Tucsonand Atlanta, where iBuyers bought homes for a median of $191,500, $200,400and $207,800respectively.
- In 18 of the 19 iBuying metros for which we have a year-over-year comparison, iBuyers sold homes faster in the fourth quarter of 2019 than the fourth quarter of 2018. The change was most drastic in
Sacramento, where iBuyer homes were on the market for a median of 20 days, compared to 90 days in the fourth quarter of 2018.
To read the full report, complete with interactive graphs, metro-level data and detailed methodology, please visit: https://www.redfin.com/blog/ibuyer-real-estate-q4-2019/
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 90 major metro areas across the
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