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Several iBuyers, or companies that make instant cash offers for homes, are suspending their home purchase programs due to the coronavirus pandemic.
What Happened
Redfin Corp (NASDAQ: RDFN) made an 8-K filing to the Securities and Exchange Commission saying that as of March 18, RedfinNow, the company’s business that buys homes directly from homeowners, would temporarily pause making offers on homes. Glenn Kelman, the CEO of Redfin, published a blog also submitted to the SEC, in which he wrote that growth in the home buying demand had plummeted thirty percent to zero in two weeks. Furthermore, traffic growth on the Redfin website has fallen into the single digits from 20% in the first two months of 2020.
Home purchase programs are being impacted by the current COVID-19 pandemic.
Zillow Group Inc. (NASDAQ: Z) (NASDAQ: ZG) announced on Monday it was suspending home buying in its 24 markets due to local public health orders. The company will continue to market and sell homes through Zillow offers, but will temporarily halt plans to open additional Zillow Offers markets.
Opendoor is also pausing cash offers for homes. The realtor will contact those sellers who are currently in their offer process. For others, it is offering a third party cash offer and listing with a partner agent as a recourse. Self-tours are available without the need for interaction with more individuals present.
Realogy Holdings Corp (NYSE: RLGY) is suspending RealSure, its iBuyer program. The company said in a statement, “To maintain the integrity and future of RealSure, we made the difficult decision to suspend all-cash offers at this time,” according to Realtor Magazine, a publication of the National Association of Realtors.
Why It Matters
Ibuyers, or instant buyers, are billion-dollar businesses. RedfinNow alone is worth $3.8 billion. These realtors are a valuable resource for sellers seeking to monetize their homes in uncertain or desperate times. Unfortunately for sellers, the present pandemic has made viewings impossible to arrange due to lockdowns and stay-at-home orders.
According to Housingwire, a real estate news portal, The emerging dominance of iBuyers can be gauged from the fact that top U.S. iBuyers purchased one out of every 100 homes sold in 2019 in more than 200 metro areas and have doubled their market share since 2018.
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