Top 5 Stories The Defined Real Estate in 2021 | The iBuyer Experiment - Stop & Chat #41

Stories that Defined Real Estate in 2021

This week the group will discuss the top stories of 2021 in the real estate industry.

First, Zillow acquired Showingtime for $500,000,000. The industry exploded .. It was like stepping on an anthill. But really if you look at it, they actually got a good deal on that data. They are able to see how many houses are opened on a daily basis in real-time. And this gave them a seamless “agentless” showing system, which helped live offers work.

The next big story is “Zillow Fail” Zillow quit iBuying, they didn’t necessarily fail, but they struggled with how to flip a property with the actual boots on the ground. Zillow severely underestimated the complexity of the real estate transaction and what it takes for that transaction to take place. Zillow will likely be an aggregator for iBuying and poor buying. 60% of their plan worked, they will be back.

The institutionalization of America … The reason Zillow was able to unload 7,000 or so of the homes they had purchased is because of the institutional buyers. A couple of weeks ago Mike with Altos Research shared with us that quarterly about 10% of homes sold are to an institutional buyer. That means that a fairly large percentage of our housing stock is being turned into long term single family rentals, and more of these types of buyers and transactions are coming.

Let’s touch on the insane market conditions next. We’ll define a “normal” market as something like one million homes available on the market on any given day and about six million homes sold nationally per year. The total unit count is going to be crushed. Here in the Phoenix metro even with really low inventory day to day the annual units sold is up. Nationally this year we are going to surpass 6.5 million homes sold, and that number has been trending up year-over-year. At the beginning of 2021 the average rate published by FreddyMac was 2.65%, and for one didn’t expect rates to still be as good as they are at the end of the year, but we are still at 3.12%. These are still historic low rates and that is helping feed the market. REALTORS have had to change and up their game, do things like we are doing to address the fast changing market.

Finally the biggest story, which isn’t getting the attention it should be. DOJ withdraws from the settlement agreement with NAR in July. The U.S, Department of Justice and the National Association of REALTORS came to an agreement because there were potential antitrust practices form NAR and it’s members that were deemed to be anti-competitive and were affecting buyers and sellers. DOJ felt that the settlement would prevent them from making future claims. This tells us that the DOJ is going to continue to investigate NAR and that affects all of us.

It’s been a wild year and 2022 is likely to be more of the same.