Mark Cipolletti Knows How to Market His Business
iBuyers Struggled in 2022: Their Rise, Fall, & Outlook for 2023
The real estate industry is an ever-changing landscape filled with complex transactions and solutions. In more recent years, iBuyers like Offerpad and Opendoor have come onto the scene and slowly grown in popularity. These companies are disrupting the traditional selling process by offering instant all-cash offers on homes.
While these types of companies are intriguing to many homeowners, they still only accounted for 1% of home purchases in 2022 and have limited areas where they do business.1 These companies were also thriving during the pandemic madness but may now be starting to decline.
The Decline of iBuyers in 2022
While some homeowners may be interested in their services, iBuyers have had their fair share of struggles in 2022 and may continue to do so. These companies first came into the picture in 2014, but it wasn’t until a few years later that they started to make some headway. In 2021 when the market was chaotic from the pandemic, purchases from iBuyers doubled compared to 2019 pre-pandemic levels.2 For these companies, business was thriving.
Now as the market starts to cool down, many iBuyers find their business cooling down as well. Traditionally, these companies would look to flip homes and gain a nice profit, but with high mortgage rates and decreased demand from buyers, homes are struggling to sell. Only 30% of homes bought by iBuyers in June of 2022 were resold by the end of the year.3
These companies are starting to feel the impact of the market. The first to falter in the business was Zillow. At the end of 2021, the company announced it would end its iBuying business and saw a $205 million write-down as a result.4
While Zillow has since partnered with Opendoor to offer iBuying services, Opendoor struggled in 2022. In August, Opendoor reached a $62 million settlement with the Federal Trade Commission for misleading customers into thinking they could make more money with their company rather than selling on the open market. The company also saw a $1.4 billion net loss in 2022.5
Other iBuying companies also struggled in 2022. In November, Redfin shut down its iBuying operation citing the increased cost of financing. Offerpad also reported a $148.6 million net loss in 2022 and has been teetering on the line of being delisted from the New York Stock Exchange because of plummeting shares.5
The spring 2023 real estate market looks like it will continue to present challenges for iBuyers. With high mortgage rates, barely affordable home prices, and buyer demand down, iBuyers who declined in 2022 will likely continue to struggle.
While iBuyers Struggled in 2022, Curbio Thrived
While iBuyers struggled in 2022, Curbio has grown. As a pre-sale home-improvement concierge service, we help homeowners sell their homes for more money as well as faster. Our pay-at-closing model also ensures that our services are affordable for homeowners who cannot pay upfront.
While some iBuying companies shut down in 2022, we expanded our business to 7 new markets. We also ranked 158th on Deloitte’s 2022 Technology Fast 500 list. This designation is based on the percentage of fiscal year revenue growth from 2018 to 2021. At Curbio, we grew a whopping 913% during this time. Unlike for iBuyers, it appears that Curbio’s future is bright.
Beat Out iBuyers
Although iBuyers struggled in 2022, their business model is still appealing to some homeowners. In order to be successful in the real estate industry, you need to be able to sell yourself and stand out from the instant benefits they offer. When you partner with us, you have that extra selling point you need to win listings and satisfy sellers.
Unlike the iBuying model where the company makes the profit, homeowners make the profit. With $0 due upfront, sellers also do not have to worry about paying for the home improvement projects upfront.
Along with putting more money in the seller’s pockets, Curbio projects tend to have a faster project completion time than typical general contractor projects, and our houses also typically spend fewer days on the market. So, if your seller is worried about time and wants to sell quickly, we may still be able to help.
Finally, home renovation can be stressful, but we make it easier. Our turnkey home improvement solution ensures that both you and the homeowner can rest easy. We manage the entire project and give you updates every step of the way. Don’t lose business to iBuyers. Partner with us and see your business soar.
- Bankrate (2023). IBuyers: Is iBuying a good alternative?
- CoreLogic (2022). iBuyer Activity in 2021 Doubled from Pre-Coronavirus Levels
- CoreLogic (2023). Single-Family Home Investor Share Remained High in Q4 2022, With Smaller Investors Driving Demand
- GeekWire (2022). After ditching home-buying business, Zillow Group partners with rival Opendoor
- RubyHome (2023). iBuyer Stats: Companies & Market Share (2023)