In 2021, iBuyers purchases jumped to double prepandemic levels, accounting for tens of billions of dollars in home sales. Las Vegas was one of the top markets for startup investments. Maxson was outmuscled by cash offers from Opendoor and Zillow. The home on Dancing Ave. was listed on June 24 for $470,000 and was paid less than two weeks later. Maxson agreed to close at just under the asking price.
Maxson's dream home is on Dancing Avenue.
When he went to look at the property, he found a leak in the water that had eroded the garden walls and flooded the neighbors yard. The city authorities weren't aware that the home was owned by a Seattle-based company and that a notice was stuck to the garage door threatening a fine for allowing green water to pool. The owners of the homes were disconnected from it because it was just a number on a spreadsheet. He lost $2,000 on inspections and other costs, the closest he came to securing a home.
The startup that profited from his dream home was discovering cracks in its own foundation. In three months, the company lost more than $400 million due to erratic house buying and unprofitable sales. Analysts wondered if other iBuyers were at risk or if the entire tech-driven model was even viable after Zillow Offers shut down. The bigger question remains: Does the arrival of Silicon Valley tech point to a better future for housing or an industry disruption to fear?
The US housing market was close to running out of records. The Washington Post reported house prices at all-time highs, with a median of $386,000, as the number of homes listed hit record lows. Cash-rich investors and second- home buyers bought more homes in the summer than ever before, as the average home sold in 15 days. The New York Times asked if real estate would ever be normal again.
Despite making just under 2% of home purchases nationwide, iBuyers began to play a larger, and more unpredictable, role than most, leading to calls from city leaders in Los Angeles to ban the platforms. iBuyers bought 70,400 houses. Nascent iBuyers are raising funds in the United Kingdom, Europe, and Canada, but all are looking to the successes and failures of the front-runners.
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