Wednesday, December 07, 2022

Slowdown in US housing market hit Opendoor’s ‘iBuyer’ model

San Francisco, EEUU / Gtres

The residential market in the US is hitting the brakes in price growth, but topped in the number of home sales. A situation whereby companies are incurring losses such as open doorbased on iBuying’ model For which some platforms in the US act as real estate agents who buy flats directly from individuals and then sell them. According to ypitdatawas forced to waive 42% of the nearly 1,000 operations conducted during August.

The slump in demand has been followed by a slowdown in both housing construction and transactions during the summer. The rise in mortgage rates has weakened the financing options of buyers, and the ‘Ibuyer’ platform is one of the sellers most affected by this slowdown in activity.

opendoor technologies Immediate Buyer was a pioneer in the US housing market in the concept of the ‘immediate buyer’. Since 2014, platforms such as Opendoor and Zillow have developed direct purchases of homes from individuals as part of their business, so that they can later be improved or not, and put them back on the market, sometimes- Sometimes only a few months after the first operation. Zillow hasn’t done well with the ‘ibuying’ model.

company open door Sells thousands of houses in a month, but had to negotiate a reduction in average value in 42% of his transactions during the month of August. Yipitdata study, In a major market such as Los Angeles, 55% of operations in Phoenix and up to 76% were discounted.

Shares are down 72% this year as of the September 16 close.

Opendoor has already warned investors that it expects revenue to fall approx. $175 millionApproximately €175 million, in the section on adjusted earnings before taxes, interest and depreciation of housing in the third quarter.

“For the third quarter, we revised our guidance on the latest earnings to reflect longer-than-normal volumes and new home prices as well as longer-than-usual for our inventory, with the sharpest growth in residential real estate fundamentals. Connected. Over 40 years,” Opendoor said in a statement. “We have moved quickly and decisively to prioritize inventory positioning and risk management.”

According to a research note, this summer is reminiscent of the price problems that plagued Zillow’s ‘iBuying’ business last year. Mike Delpreette, Academic at the University of Colorado Boulder, “This does not mean Opendoor will go out of business, but it reflects the depth of the loss, and September is likely to be worse than August,” suggests Delpreet’s analysis. “Opendoor’s metrics are in the danger zone,” he said. “They are very close to where Zillow was at worst.”

When home prices skyrocketed at the start of the year, Opendoor turned a profit quickly. Then again, declining affordability and mortgage rates are up 6% this spring, easing demand.

By June, prices had begun to decline in some areas, especially medieval homes. ‘Sun Belt’ marketStates of the so-called ‘Sunbelt’ in America from Florida to CaliforniaWhich increased the most during the pandemic.

The change has taken Opendoor by surprise, forcing it to sell thousands of properties at a time when prices were still rising. Instead of canceling the contracts, Opendoor decided to honor the offers, interpreting the decision to investors as an investment in the company’s brand. Shares are down 72% this year as of the September 16 close.

to other experts . CEO of Tyler OaklandThe worst is over, and Opendoor will end up selling the inventory it has acquired before the market turns, “giving you a chance to stop your losses and start selling homes profitably again.”

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