RALEIGH – Homeowners in Raleigh have options when considering selling their property in what many real estate agents consider a strong seller’s market. And many are choosing to sell faster with the benefit of more convenience at lower prices to so-called iBuyers.
According to a recent analysis of real estate transactions that took place in the second quarter of 2021, iBuyers, or companies that make instant offers to homeowners, are five times more active in Raleigh than they are nationally, on average.
Nationally, Zillow found that 1% of all purchase transactions in markets where iBuying companies such as Zillow, Opendoor, or Offerpad are active.
But in the Raleigh market, that rate is 5%, Zillow’s analysis revealed. That ranks fourth overall nationally, when measured by the percentage of sales in the market, behind Charlotte (5.3%), Atlanta (5.3%), and Phoenix (5.7%). Zillow confirmed to WRAL TechWire that the Raleigh market includes Wake, Johnston, and Franklin Counties.
And such sales are surging even though the median price of all homes sold to an iBuyer in the region was $317,000.
The median sales price for all homes sold during that same time period was nearly $360,000.
That difference is 13.5% higher when comparing the median price of all homes sold to the homes acquired by iBuyers.
“The data shows that iBuyers tend to buy and resell homes near the middle of a given metro area’s price band, illustrating the types of homes typically transacted through an iBuying service,” said Viet Sheldon, senior corporate communications manager at Zillow, in an interview with WRAL TechWire. “That data point is different than what the offer strength of an iBuyer is compared to selling traditionally because those two numbers are not the same homes.”
A recent Zillow analysis of its data, said Sheldon, shows that homeowners who declined an offer from Zillow Offers but who then later sold their home on the open market, sold homes for .09% more than Zillow’s offer.
Why do homeowners choose to sell to an instant buyer? For some, it’s about convenience, timing, or an option that lets them compete on offers for their next property without a sale contingency in their offer to purchase and contract.
Linda Nuxoll, a licensed real estate agent with EXP Realty, told WRAL TechWire about representing sellers who ultimately chose to sell to an iBuyer. She noted that two recent transactions where sellers she represented who chose to sell to Opendoor.
“The ones that sold to Opendoor were properties that weren’t necessarily going to sell quickly,” said Nuxoll. But the sellers wanted to sell quickly, so selling to an iBuyer was a good fit in that scenario.
“The other one was a family with a brand new baby, so getting their house in order, and they also needed to say they were a non-contingent buyer in order to compete,” said Nuxoll.
In total, Zillow measured 434 homes that the company noted as purchased by an iBuyer, for a total transaction amount of nearly $140 million in the Raleigh metropolitan area. For comparison, Zillow found that iBuyer transactions in the first quarter of the year totaled just over $58 million, with 213 sales to iBuyers in the region.
WRAL TechWire reviewed public records to see how active iBuyers were in Durham, Orange, and Wake Counties. In reviewing this publicly accessible data, we identified acquisitions and sales transactions from Zillow, Offerpad and Opendoor, each of which is active in the region.
In Durham County, 229 properties have been acquired by iBuyers this year, through August 31, 2021. Fifty-five of those transactions occurred in the first quarter of the year, and 52 of those transactions occurred in the month of August. 122 transactions occurred between April 1 and July 31, 2021, and Opendoor was the most active, with 165 acquisitions year to date.
In Wake County, 694 properties have been acquired by iBuyers this year, through August 31, 2021. 170 such transactions occurred in the first quarter, and 175 such transactions occurred in the month of August. 349 transactions occurred from April 1 through July 31, and Opendoor was the most active iBuyer, acquiring 488 properties year to date.
In Orange County, 22 properties have been acquired by iBuyers through August 31.
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Earlier this year, Redfin found that Raleigh, Charlotte, and Durham were the three top markets where iBuying occurred. According to the latest Redfin data, sent upon request to WRAL TechWire, 3% of all homes sold in the Raleigh market were sold to iBuyers.
In Durham, 2.9% of all transactions went to iBuyers. And while the median sale price in Raleigh has increased 18.56% and in Durham the median sale price has increased 22% year-over-year, according to Redfin’s data, the median sales price of a home sold to an iBuyer in Raleigh has jumped 46.35% year over year, and leaped 63.78% in Durham.
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Record sales coming, amidst ‘extremely competitive’ market?
With a high volume of acquisitions in the second quarter by iBuyers in the Triangle, a new record for sales from iBuyers could be set in the third quarter, Zillow said in a statement sent to WRAL TechWire.
While the three iBuyers tracked by WRAL TechWire have acquired 945 properties in Durham, Orange and Wake Counties in 2021, according to the public records analyzed by WRAL TechWire The three companies have sold 770 properties this year.
Opendoor has sold 442 properties including 86 in August, Zillow has sold 81 properties, and Offerpad has sold 81 properties.
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