Among the many afteraffects of The Great Reshuffling has been a shift in the drivers of online real estate success.  Our CE Web data track these drivers for the instant buying businesses of Offerpad, Opendoor, and Zillow, and shows how the companies are adjusting to declining listings.  In today’s Insight Flash, we evaluate what is happening for each in terms of ASP Growth and the ratio of homes sold to homes acquired, as well as which states are more exposed to homeowners versus renters.

Since the beginning of the year, Opendoor’s Average Selling Price (ASP) growth has consistently outperformed Zillow’s.  Opendoor’s ASP growth has trended within a 13-27% band since mid-January, while Zillow’s has been about 5% lower in an 8-22% range.  Offerpad’s ASP trends have been more volatile, heading into negative territory at the end of February before spiking up to ~30% for most of March with a high of 36% y/y ASP growth in the week ending April 3.

ASP Growth

Note: Instant buying business for each company

The rate at which these companies are acquiring homes to resell has changed too.  In the fall of 2019, all three companies were acquiring homes faster than they were selling them.  That balance shifted in the spring of 2020, with sales dramatically outpacing acquisitions – as high as almost 30x for Zillow, almost 20x for Opendoor, and almost 4x for Offerpad.  This slowed down in the second half of 2020, with only Opendoor selling more homes than it was purchasing in August and September, and all three companies selling well below acquisition in October and November.  Since January, only Zillow has been able to sell more homes than it acquired, with a sold-to-acquired ratio over 1.5x in the last week of February.

Sold vs. Acquired

Note: Instant buying business for each company

Changes in demographics will have an effect on these companies.  Our CE Transact data shows Michigan with the highest homeownership rate at 60%, followed by Ohio and Oklahoma.  DC has the highest proportion of renters at 22%, followed by Nevada, Oregon, New York, and Washington.

Home Ownership Rates

Note: 364 days ended 4/4/2021