Lunch & Learn: The State of Housing

As housing supply dwindles, affordability concerns grow while competition heats up the market. This Lunch & Learn will examine the current state of housing, featuring experts who have an eye on the market.

HousingWire Annual Virtual Summit

Join us on October 25 for a chance to see a handpicked selection of sessions from HousingWire Annual along with technology demos from the most innovative tech companies! Register now for FREE to experience HW Annual just like you were there.

How credit scores impact lenders’ pipelines in a purchase market

When a lender works with a borrower to improve their credit score, they are able to offer the most competitive rate and terms. Learn more here!

Volly’s Grant Moon on challenges facing veterans

In this episode of HousingNews, we are joined by Grant Moon who discusses the difficulties veterans face during the home-buying process and misconceptions about VA loans.

Real Estate

Can Offerpad make iBuying work?

Company CEO Brian Bair is relying on in-house real estate agents and renovators to drive instant home buying

You’re about to read another story about instant homebuying, or iBuying. That’s even though iBuying sales made up less than 0.5% of the total U.S. residential real estate market in the second quarter of 2021, according to a report from Redfin.

If iBuying ran for public office, it would need to more than double its market share to garner 2020 Libertarian Party presidential candidate Jo Jorgenson’s percentage of the popular vote.

So, why should you care?

Because three companies – Zillow, Opendoor, and Offerpad – have, after a major setback at the start of the pandemic, generated enough capital to buy and sell thousands of homes a year. And one of these companies – Offerpad – found a way to make money, grist for Wall Street analysts such as Ygal Arounian of Wedbush Securities that expect iBuying to dramatically scale up in the coming years.

Offerpad is a six-year-old company founded in 2015 by Brian Bair after a career in real estate investing. The company promises to make a cash offer on your home within 24 hours of you expressing interest in selling.

If the offer is accepted, Offerpad goes to work on renovating the home and trying to resell it for significantly more than they bought it for.

The company is based in Chandler, Arizona and until recently only operated its business in the South – markets like Orlando and Birmingham, Alabama – before expanding into Indianapolis and Columbus, Ohio.

Offerpad earned $9.2 million in income in the second quarter of 2021, generating $279 million in revenue through the sale of 1,279 homes. These homes were sold at a difference of $31,500 from what the company purchased the homes for.

IBuying observers like Mike DelPrete single out Offerpad as perhaps creating a more sustainable business model for ibuying. The company went public this month following the completion of a merger with a special purpose acquisition company co-chaired by former Zillow CEO Spencer Rascoff.

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