Highlights. iBuyer market statistics reflect a volatile moment in the industry; market share dropped from 1.7% to 1.3% from Q4 of 2021 to Q1 of 2022. That drop indicates that some companies may have over-purchased and overpaid.
- Direct-buyer companies or iBuyers control up to 1.3% of the national metropolitan real estate market.
- iBuyers offered an average 86% of market value for homes in the first quarter of 2022.
- The median iBuyer purchase price is $347,000.
- Up to 20% of iBuyer sales are purchased by a growing number of institutional investors, such as rental companies.
|Quarter||Rate of Home Purchase*||YoY Change|
*The number of houses purchased by iBuyers expressed as a percentage of all homes sold in that quarter nationwide; rate of purchase does not necessarily reflect market share.
National iBuyer Market Statistics
iBuyer market performance appears to have declined in the latter months of 2021 though financial specialists suggest the iBuyer business model may still be profitable.
- iBuyers’ median purchase price is 24% lower than the nationwide median home price of $375,639.
- iBuyer home purchases were down 42% year-over-year (YoY) from 2021’s fourth quarter (2021 Q4) to 2022’s first quarter (2022 Q1).
- iBuyer market share declined by an estimated 24% in 2022 Q1.
- Realtors report that 2% of homes they sold from May to July 2021 were purchased by iBuyers.
- Real estate agents receive an average 2.28% commission when they sell to an iBuyer.
- Up to 87% of home buyers still use a real estate agent.
|Quarter||Homes Purchased||YoY Change|
Regional iBuyer Market Statistics
iBuyers are most active in southern states in the U.S. Phoenix, home to Opendoor and Offerpad, continues to see significant activity in the iBuyer market.
- North Carolina had the top 3 iBuyer markets in 2021 Q1, with market shares averaging 2.7%.
- Raleigh, North Carolina, had the largest market share in 2021 Q1, with 2.9% of home sales going to iBuyers.
- In Tuscon, Arizona, iBuyers purchased up to 6.1% of homes sold, the highest market share; Atlanta had the highest number of transactions with 1,628.
- In some markets, iBuyers take 13 days to sell an average home.
|Metro Area||Market Share 2022 Q1||Market Share 2021 Q4|
|Dallas-Fort Worth, TX||5.1%||5.8%|
|San Antonio, TX||5.7%||6.1%|
|Las Vegas, NV||4.0%||7.1%|
iBuyer Company Statistics
iBuyer companies use algorithms to evaluate homes for purchase and calculate their market value. After a free home inspection, many companies will make an offer within 48 hours.
- The unofficial industry-wide standard service fee is around 5%.
- Major iBuyer companies posted net losses in 2022 Q1 because U.S. home sales fell 21% quarter over quarter.
- Opendoor sold more homes than Zillow and Offerpad from 2019 to 2022 Q2.
- Zillow Offers reported significant losses in 2019, 2020, and 2021.
“We’re being very aggressive when it comes to buying homes right now — it’s all gas, no brakes.” Myron Curry, Senior Investment Specialist at RedfinNow
Opendoor is one of the most well-established iBuyer companies with locations in over 51 major cities.
- Opendoor charges anywhere from a 5% to 14% service fee.
- Buyers’ agents can get a 1% commission.
- Opendoor had direct selling costs of more than $195 million in sales, marketing, and operations in 2020, up 109% YoY.
- Typically buys homes between $100,000 and $600,000 (but has gone as high as $1.4 million).
- Purchases single family homes or townhomes.
- In some markets, Opendoor will purchase duplexes or condominiums.
- No prefabricated or mobile homes.
- Opendoor will not purchase homes in a flood zone
- In general, homes must be built after 1930 with a maximum lot size of 1 to 2 acres according to the service area.
- Opendoor sold more than 14,000 homes in Q2 2022.
Offerpad became a publicly traded business in September 2021 with a $2.7 billion valuation.
- Available in 31 major metropolitan markets across 16 states.
- Service fees range between 6% and 8%, depending on the local market.
- Buyers’ agents can get a 3% commission.
- Offerpad purchases single-family homes, townhomes, and condominiums.
- No prefabricated or mobile homes.
- Offerpad will not purchase homes valued at more than $1 million.
- Homes must be built after 1960 with a maximum lot size of 1 acre.
Redfin is one of the top brokerage sites nationwide; its iBuyer service is RedfinNow.
- Available in 15 states and Washington, D.C., with plans to expand.
- RedfinNow charges service fees ranging from 5% to 13% based on the property’s condition.
- Offers are valid for 5 days.
- Sellers may select a closing date between 10 and 45 days after RedfinNow’s final offer.
- RedfinNow does not purchase homes in age-restricted communities.
- The maximum lot size is 0.5 acres.
- No manufactured or mobile homes.
|What iBuyers Want||What iBuyers Don’t Want|
|Ready-to-market with no repairs or renovations needed.||Fixer-uppers or homes that require extensive work.|
|Median value homes that are close to the average fair market price.||Luxury homes or homes priced higher than the area’s median value.|
|Basic or standard blueprints with no customizations.||Unique or custom features or fixtures.|
|Modern construction though not necessarily new.||Old with construction dating back 50 years or more.|
Throughout 2021, Zillow Offers’ algorithm approved more home purchases than ever. In November 2021, Zillow announced it would end its iBuying program after less than three years
- Zillow Offers sold 786 in 2019Q2, up from 414 in the previous quarter.
- Zillow increased iBuyer sales by 89.9% from 2019’s first to second financial quarter.
- Zillow claims it plans to sell 7,000 homes for $2.8 billion – an average of $400,000 per home – to institutional investors.
- Traditional listings on Zillow sold for 0.09% more on average than similar listings from Zillow Offers.
- Opendoor 2021 Report: The Hearts & Minds Behind Today’s Housing Market
- RedFin News, iBuyer Home Purchases Inch Back Toward Pre-Pandemic Levels
- U.S. Census Bureau, Business & Industry: New Residential Sales
- United States Securities & Exchange Commission, Opendoor Technologies Inc. Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
- CNBC, Zillow Says It’s Closing Homebuying Business, Cutting 25% of Workforce; Earnings Miss Estimates
- Offerpad, Seller FAQs
- Opendoor, What Types of Homes Does Opendoor Purchase?
- Redfin Now, iBuyer Market Continues Slow Recovery, With Decline In Home Purchases Narrowing to 48% In the Fourth Quarter
- Zillow, What is Zillow Offers?
- Zillow, iBuyers Are Helping People Move in Record Numbers
- iBuyer Offerpad goes public at $2.7B valuation
- RedfinNow FAQ
- Offerpad and Its More Profitable Flavor of Buying
- National Association of Realtors, Economists’ Outlook
- Zillow Research
- Bloomberg, Wall Street Is Using Tech Firms Like Zillow to Eat Up Starter Homes
- Census, Monthly New Residential Sales
- The iBuyer War on Real Estate Commissions
- National Association of Realtors, Highlights From the Profile of Home Buyers and Sellers
- What Is an iBuyer?
- Zillow Group Quarterly Results
- The Cost of Zillow Offers vs. a Traditional Sale
- U.S. Sens. Tina Smith, Sherrod Brown, Jack Reed Seek Answers on Zillow’s Sale of Thousands of Homes to Private Equity Investors