Are real estate companies buying Boston luxury condos?
Everyone is getting into the home-buying business, not selling, but buying. First it was the well-funded disrupters like OpenDoor and Offerpad, and then Zillow, Redfin, and others will jump in – such as Coldwell Banker, Keller Williams, trust me they won’t be far behind.
So who will win this game of buying properties? Zillow is already in the driver’s seat that others will need to catch.
From Mike DelPrete – an excerpt:
Zillow announced its Zillow Offers program in Phoenix earlier this year, and started buying houses in May. It is heavily promoting the program across its site. While looking in the Phoenix market, a prominent message is displayed on all active for sale listings.
In its latest quarterly results, Zillow revealed how effective the promotion was:
“Since launch, we have received more than 10,000 offer requests from potential sellers.” And: “…in Phoenix, for example, we are seeing about 15% of all dollar value that’s being sold in Phoenix any given month.” That translates to about 1,600 offer requests per month.
Opendoor is another contender on record saying that more than “one in two sellers who received an Opendoor offer” will accept it. It’s currently buying around 300 houses per month in Phoenix, so that’s about 600 offers made per month.
There’s a difference between an offer being requested, and an offer being made. What’s clear, though, is that Zillow is generating a massive amount of offer requests each month, at volumes that rival (and exceed) Opendoor.
Most importantly, Zillow’s leads are coming with zero incremental customer acquisition cost, while Opendoor and other iBuyers must advertise directly to consumers to generate leads.
As of today’s date Zillow isn’t in the game of buying Boston luxury condos, but I expect that will change soon.