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Redfin recently released a report revealing the top markets where iBuying, a new quick, hassle-free way to sell a home, is rapidly growing. Currently, the largest iBuying companies like Offerpad, Zillow (NASDAQ: Z), Redfin (NASDAQ: RDFN), and Opendoor offer their instant buying services in 20 metro areas. Of the most active 18 markets, three metro areas and eight neighborhoods had 10% or more of their market share being purchased or sold by iBuyers.
If you're unfamiliar with iBuying, homeowners in participating markets can request an online offer for their home. iBuyers use an algorithm to determine a cash purchase price for the property, giving the homeowner an instant offer. iBuying closes quickly, in as little as a few weeks, and properties are typically purchased sight unseen.
The top 8 neighborhoods for iBuying market share
|Rank||Neighborhood||City / Town||Share of Home Sales Purchased by iBuyers, 2019||Share of Home Sales Purchased by iBuyers, 2018||Median Price of Homes Sold by iBuyers, 2019||Neighborhood Median Home Sale Price, 2019||Metro-Wide Median Home Sale Price, 2019|
|1||Pecan Creek||San Tan Valley, AZ||13.7%||10.4%||$229,923||$245,900||$278,000|
|4||Highland Creek||Charlotte, NC||11.3%||4.1%||$242,000||$269,250||$258,612|
|5||Back Creek Church Road||Charlotte, NC||10.8%||5.3%||$220,000||$225,500||$258,612|
|6||Sendera Ranch||Fort Worth, TX||10.8%||8.4%||$215,000||$229,000||$215,500|
Top 3 cities where iBuying is growing
|Rank||City||Metro Area||Share of Home Sales Purchased by iBuyers, Q3 2019||Share of Home Sales Purchased by iBuyers, Q3 2018||Median Price of Homes Sold by iBuyers, Q3 2019||City Median Home Sale Price, Q3 2019||Metro-Wide Median Home Sale Price, Q3 2019|
|1||Knightdale, NC||Raleigh, NC||14.8%||6.1%||$200,000||$245,000||$291,000|
|2||Tolleson, AZ||Phoenix, AZ||11.8%||1.7%||$234,900||$238,000||$281,250|
|3||San Tan Valley, AZ||Phoenix, AZ||10.6%||9.9%||$228,425||$246,995||$281,250|
Top 10 markets where iBuying is most active
|Metro Area||Share of Home Sales Purchased by iBuyers, Q3 2019||Share of Home Sales Purchased by iBuyers, Q3 2018||Median Price of Homes Sold by iBuyers, Q3 2019||Median Price of Homes Sold by iBuyers, Q3 2018||Metro-Wide Median Home Sale Price, Q3 2019|
|San Antonio, TX||3.6%||2.5%||$184,750||$205,000||$235,000|
|Las Vegas, NV||3.3%||3.4%||$285,000||$289,000||$288,000|
The top markets, neighborhoods, and cities where iBuying is the most active are primarily in the South, in areas where the median home price is less than the national average of $313,200 as of October 2019. Their ideal position among the top markets has been purchasing two-story homes built in the '90s and 2000s, although their model may shift as they continue to expand. Homes being sold by iBuyers were on the market for an average of 28 days, which is a huge improvement from the prior year's average of 74 days on the market.
iBuying is still a relatively new method for buying and selling homes, and iBuying companies are constantly refining and improving their processes to make their model more effective. 2020 is expected to bring further expansion to expensive coastal markets. As buyer confidence in the iBuying model grows, it's likely market share sales from iBuying will only continue to grow as well.
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