The number of homes bought and then sold by iBuyers soared to new heights in 2021 and Phoenix ranked No. 2 in the U.S. for the number of home iBuyers. The final three months of 2021 saw a slowdown from the previous quarter amid the typical winter housing market deceleration, yet still represented the second-strongest quarter in history in terms of the number of homes sold using an iBuying service.
Instant buyers, commonly known as iBuyers, are home-buying and -selling services that typically buy off-market homes directly from sellers at market rate and, after making light repairs and updates, quickly list them for sale on the open market. In the 38 largest iBuyer markets, homeowners sold 21,523 homes in Q4 using one of the three largest iBuying services: Opendoor, Zillow Offers and Offerpad. That figure represents 1.7% of all U.S. home sales last quarter, down from 1.9% in Q3 2021. Those iBuyers sold 21,398 homes during the same period.
In total, iBuyers purchased 70,402 homes in 2021, more than double the previous annual high of 32,726 homes in 2019. They completed 44,933 home sales last year, exceeding the previous high of 28,265 homes sold in 2019.
The median price of homes sold using an iBuying service dipped to $372,100 in Q4, but remained above the overall U.S. median sale price of $335,060. iBuyers tend to operate in larger, more-expensive housing markets, helping skew the national numbers. In 24 of the 33 metro areas for which data is available, the median price of homes sold using an iBuying service was less than the overall median sale price in that metro.
Of homes that were bought and sold by an iBuyer in Q4, the median markup — the difference between the purchase price and sale price — was 1.1%. That’s up from a revised 0.7% in Q3, but is the second-lowest figure in any quarter since 2018, when Zillow began tracking this data. The median markup was 7% in Q4 2020 and reached a record high of 8.6% in Q1 2021.
Atlanta regained its place at the top of the list of metros with the most homes sold using an iBuyer, surpassing Phoenix in Q4. Dallas–Fort Worth, Charlotte and Houston rounded out the top five. While about 20% fewer homes were sold using an iBuyer nationally in Q4 compared to Q3, the number of iBuyer sales increased over that time in four markets: Columbia, South Carolina (+91.2%); Miami (+21.9%); Lakeland, Florida (+5%); and Raleigh, North Carolina (+4.2%).
Raleigh was the only metro where more than 1 in 10 homes sold last quarter were sold using an iBuyer (11%). Tucson (9.5%), Atlanta (8.9%), Jacksonville (8.9%) and Phoenix (8.8%) narrowly missed that mark.
iBuyers typically held the homes they sold in Q4 for 98 days, which includes getting the home ready to sell, the time the home spent on the market and the time it took to close. That’s three weeks longer than a revised 79 days in Q3 2021 and more than a month longer than the record low of 63 days in Q2 2021. Winter is usually a slower season for the housing market as buyers go into hibernation and homes take longer to sell, which likely contributed to the longer hold time for iBuyers. In addition, the labor and materials shortages that have contributed to a new-home construction backlog are likely slowing the speed of repairs and updates made by iBuyers as they get homes ready to sell.
