For the third consecutive quarter, Raleigh, N.C., led the nation in iBuyer market share, according to a report by Redfin.
Nearly 8 percent of homes bought in Raleigh during the fourth quarter were purchased by iBuyers, Redfin found. Durham, N.C. (6.2 percent); Atlanta (5.8 percent); Phoenix (5.7 percent); and Charlotte, N.C. (5.2 percent) all exceeded 5 percent iBuyer market share in the fourth quarter.
“It’s no surprise Raleigh and Phoenix led the nation in iBuyer share [in 2019] because those housing markets are iBuyer sweet spots and are poised for price growth in 2020,” Redfin Chief Economist Daryl Fairweather said. “These markets work well for iBuyers, which tend to purchase homes that are relatively affordable, were built within the last few decades and are easy to price accurately because they are located in tract neighborhoods with largely homogenous housing stock.
“iBuyers also try to buy homes that will likely retain or increase in value over the short period between purchase and sale,” Fairweather said. “Our forecasts indicate that both Phoenix and Raleigh will have strong price growth in 2020.”
According to the report, iBuyer market share grew the most year-over-year in Tucson, Ariz., where iBuyers bought 3.1 percent of the homes in the fourth quarter of 2019, up from zero purchases a year prior. Denver saw the second-largest increase, up to 2.7 percent from just 0.4 percent a year prior.
The report said market share fell year-over-year in Las Vegas (-3.4 percent); Phoenix (-1.2 percent); and Orlando, Fla. (-1 percent).
Redfin said the most expensive markets for iBuyer purchases were Riverside, Calif., Denver and Portland, Ore. The most affordable markets for iBuyer purchases were Jacksonville, Fla., Tucson and Atlanta.
“It’s a seller’s market right now, but this can be a double-edged sword for sellers who also are looking to buy. iBuyers are a big help for folks who need the equity from their current home to buy the next and want the flexibility of lining up their sale with the purchase of their new home,” Fairweather said. “Homeowners who may have been reluctant to sell because they were concerned about carrying two mortgages or worried about the stress of choreographing two transactions may be persuaded by the convenience of an iBuyer sale.”