A Quick Note on iBuyers Pausing

I got an email this morning from Mike Delprete about Redfin and Opendoor “pausing” buying activity due to the COVID-19 situation:

By temporarily pausing the purchase of homes, Opendoor has shut off its only source of revenue; there’s no iBuying without buying. The effect is akin to an airliner losing both engines while in flight.

With no revenue — Opendoor’s engines — the company will glide until it either manages to once again generate revenue, or it runs out of money. Opendoor is not alone in this predicament; many businesses across a number of industries face the same challenge.

Let’s tap the brakes just a touch. As Mike’s own data from China shows, transactions plummeted to near zero as people were quarantined and on lockdown. Then it went back to near normal levels.

It isn’t as if Opendoor is the only one not buying; in some parts of the country, no one is buying because the county clerk’s office has shut down. Buyer tours can’t happen if there is a shelter-in-place order. The authorities, inspectors, brokers, agents, etc. are working through things but it’s still very early.

We don’t know just how much inventory Opendoor had on hand; they might just be looking at things and saying, “We’ve got 30 days of inventory on hand; let’s take a breather while no one is buying our houses either.”

Until we get more information, I’d caution against reading too much into the pause. I wouldn’t be surprised if Zillow paused as well while the whole world is in lockdown mode.

BTW, Redfin pausing is really no big deal as Redfin hasn’t truly been an iBuyer for a while.


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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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3 thoughts on “A Quick Note on iBuyers Pausing”

  1. ROB,

    Doesn’t your post dampen the “market-maker” moniker? Market makers make two sided markets all the time, not sometimes. They may reduce their bid…but jump out of the pit and go to lunch for the day/week/month/year?

    I guess this means “pausing” until the market stabilizes. Then, if/when the water is safe to go back in they’ll be back buying. That is not what market-makers do….that’s what well capitalized buyers of homes do if, and only if, the market cooperates.

    BTW – I’m always bullish. My thoughts are on the business model – not the state of the market.

    We’ll see.


    • So if trading is suspended, does that make Goldman Sachs not a market maker anymore? If this happened three months ago, sure, you’ve got a point. Today?

  2. ROB,

    IMO, the worst part of “pausing” is re-starting. Who blows the all-clear horn? These guys are now going to have to time the market as well as make one – not an easy thing to do.

    Stay well and safe…

    We’ll see.


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