iBuying exploded onto the housing scene a few years ago with the potential to change how we buy and sell our homes. After Zillow and Redfin exited the sector, Opendoor now controls the lion’s share of the iBuyer market.
But as higher mortgage rates and the threat of economic slowdown have slowed housing in general, where do Opendoor and iBuying go from here? How will Opendoor adapt to changing market forces? Will they try new tactics and develop new strategies? What will they do more of or less of? And how will Opendoor interact with other major market players, such as new home builders?
On this episode of New Home Insights, Dean Wehrli talks with Alex Toth and Derek Schairer, who manage Opendoor’s home builder program, about how Opendoor plans not only to survive but thrive as they evolve.
Alex Toth, General Manager, Opendoor Homebuilder Partnerships
Derek Schairer, General Manager, Opendoor Homebuilder Partnerships
A reminder of the core appeal of iBuying
- Like so much else in our lives, home buyers crave convenience, certainty, and a customer experience as pain free as possible.
- The certainty of iBuying can help in a marketplace with so much uncertainty around mortgage rates, pricing, and economic conditions.
- iBuying allows a homeowner to tap into their equity with more speed and certainty than a traditional process ever could.
- iBuying is a natural extension of the maturation of the home-buying world and of moving from offline to online.
- Still, the market has cooled with more pain on the way. Can iBuying take enough of that pain away to find its future?
How is the changing housing market impacting iBuying?
- Cycles are a reality of housing, but there is no question that iBuying activity is down as the market has cooled.
- More recently, lower mortgage rates brought the same pop to Opendoor as they did to the larger market, but volatility in rates adds uncertainty.
- Opendoor’s builder business parts have lowered prices and incentivized to find sales, all in the name of affordability. Can Opendoor help buyers better afford a new home?
Opendoor partners with home builders to ease the process.
- Some of the biggest builders in the country have joined with Opendoor to improve the process. A home buyer can get an offer from Opendoor, sell their home, synchronize the escrow period, and live in their current home as their new home is being built.
- That last part is huge. Opendoor allows a new home buyer who purchases through them to stay in their home for up to nine months. This can save deals that might otherwise go sideways with unpredictable build times.
- Opendoor is partnering with builders of conventional communities, the 55+ sector, and at all parts and price points of the new home landscape.
- Though the housing market continues to find its footing and the future is uncertain, Opendoor provides builders another tool in their belt to add convenience and certainty to the process.
Note: This episode was recorded on February 16, 2023.