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iBuyers purchased a record number of homes in Southern California this spring
IBuying operations bought more than twice as many homes this spring than Q4 2020
The largest iBuyer companies bought more than twice as many homes across Southern California this spring than they did in the fourth quarter of 2020.
Zillow Offers, Opendoor, Offerpad and RedfinNow bought 789 homes in Los Angeles, Orange, Riverside, and San Bernardino counties in the first three months of the year, a 123 percent increase, according to the L.A. Daily News.
They spent $512 million, or an average of around $649,000, which wasn’t much lower than April’s median price for those counties as well as San Diego and Ventura counties.
The median price across the six-county Southern California region has continued to climb since the spring, hitting just under $682,000 in July, although overall sales have slowed.
IBuying means that companies buy properties and usually flip them. The advantage for sellers is they typically offer fair market value and can close deals within a few days.
Several listing platforms have invested in iBuying during the last few years and sellers appear to be growing more interested in the model.
It remains unclear, however, whether the model can be profitable. Zillow lost more than $300 million on iBuying in 2019 and Opendoor lost about $1 billion since launching in 2013.
Still, iBuyers appear to find more interest among sellers in Southern California than other parts of the country. IBuyers accounted for 1.2 percent of all home sales in L.A. and Orange Counties and 2 percent of all home sales in the Inland Empire, compared with the national average of 1 percent.
[LADN] — Dennis Lynch