November 30 2021
The study cites explosive growth for 'Power Buyers' as iBuyers rebound
BOULDER, Colo. - November 30, 2021 -- Homebuyers and sellers contended with historical challenges in markets across the U.S. this July through September -- and turned toward innovative solutions as a result. When available homes for purchase were scarce, average home prices hit record highs, and multiple offers with escalating bids became the norm, "Power Buyer" companies became more commonplace than ever. With upward of 70% of sellers also needing to buy a home, it was a particularly difficult time.
Power Buyers are companies offering services that give consumers more options and financial "power" to buy a home through a cash offer, a buy-before-you-sell bridge solution, or the sale-leaseback; a new zavvie Seller Preferences Report details the explosive growth of Power Buyers and changes in the iBuyer landscape throughout the U.S. between July and September.
Just released by zavvie, a brokerage-branded marketplace that connects broker-agents and their clients with new ways to buy and sell homes while keeping agents at the center of the transaction, the report also offers deep insight into the iBuyer market.
In the third quarter of this year, iBuyers doubled their acquisitions from any prior quarter and now command a 1.8% national market share. Most notable, the report indicates a trend that iBuyers are making less aggressive offers. For example, iBuyers paid about market rate — 100.6% of market value — in September compared to their July offer strength, which peaked at nearly 105% of market value.
But perhaps the most significant trend emerging from the zavvie report is the continued expansion of the leading iBuyer and Power Buyers firms, including Opendoor, Redfin Now, Offerpad, Knock and Ribbon. During Q3 alone, these firms launched their services in more than 30 major metro areas and states.
The new zavvie report also acknowledges that in November, Zillow announced it would discontinue its iBuying operations. However, the report concludes that "it's clear that Zillow's decision was completely attributable to internal factors specific to Zillow rather than to any lack of consumer demand" among iBuyers.
Stefan Peterson, zavvie Chief Data Officer and co-founder, said, "Paraphrasing Mark Twain, the reports of the death of iBuying by some has been greatly exaggerated. The fact is: iBuyer purchases increased by 46% from Q2 to Q3, a breakthrough quarter for iBuyer purchase volume."
Peterson notes that with the withdrawal of a major iBuyer firm, total volume may be impacted — and compounded by seasonal factors — but he believes other iBuying firms could increase their activity, as recent news reports indicate.
The zavvie Seller Preferences Report is the first review of its kind, covering every selling solution, including iBuyer and Power Buyers, available to homeowners and buyers throughout the U.S. It examines offer strength, offer acceptance rates, service fees, market availability, buy boxes, average concessions and time to close for selling solution providers. The complete zavvie Seller Preferences Report is available for free at zavvie.com/seller-preferences.
About zavvie
zavvie is a brokerage-branded marketplace that connects broker-agents and their clients with new ways to buy and sell homes while keeping agents at the center of the transaction. Over 65,000 real estate agents in 47 states leverage zavvie's platform to serve their clients better. zavvie gives modern brokerages and agents all they need to thrive in today's evolving real estate landscape: easy-to-use tools, technology, training, marketing, and strategy. Discover more at zavvie.com.