Real Estate Websites Temporarily Pause Residential Sales
iBuying takes a temporary break
Recent years have seen the growth of iBuyers, a group of home buyers who purchase homes online as investments, using websites like OpenDoor and Zillow to make cash offers. Also known as “instant buyers,” this class of homebuyer has grown in popularity over the past decade. It’s been a benefit to those looking to flip homes, as well as people who are looking to sell their home quickly.
But now, like many other things in society, iBuying has been put on hold. At Curbed, Jeff Andrews writes that real estate sites are putting a temporary stop to iBuying as an option. Andrews explains what the specifics of that are:
Zillow, Opendoor, and their competitors in the space have suspended homebuying activity in response to a number of local governments shutting down nonessential businesses in hopes of curbing the spread of COVID-19. The measures make buying unfeasible in some markets where iBuyers operate. Both Zillow and Opendoor will continue to sell houses.
The article notes that only 5% to 10% of the real estate transactions in most markets involve iBuying.
Earlier this month, Zillow looked at real estate data from earlier pandemics to see what could be applied to the current one. The article, by Svenja Gudell, offers plenty of food for thought. Gudell looks at the drop in economic activity during epidemics — which includes, effectively, a pause on homebuying.
“This pattern differs from a standard recession, which is a situation in which economic activity falls for 6-18 months and then recovers more slowly,” Gudell writes. It might not be the most optimistic news possible, but it does offer some glimmer of hope. Right now, that’s better than the alternative.
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