Zillow – Opendoor Doubles Home Purchases, Enticing Owners in Hot Market
(Bloomberg) — Opendoor Technologies Inc. more than doubled the number of homes it acquired in the second quarter, as the company’s tech-powered approach to real estate gained popularity with consumers.
The company, which pioneered an increasingly popular spin on home-flipping often called iBuying, gobbled up roughly 8,500 houses. That was more than twice as many as Zillow Group Inc., its closest competitor in the emerging corner of the hot U.S. housing market.
Opendoor also increased the number of homes it sold, according to a statement Wednesday. It posted revenue and profit numbers that beat analyst estimates. Shares gained in late trading.
Read more: Opendoor’s Market Debut Caps Roller Coaster Year in Housing
Opendoor uses algorithms to make near-instant offers on U.S. homes. When the homeowner accepts, it makes light repairs and puts the house on the market. It aims to profit by charging sellers a fee for simplifying the notoriously complicated process of selling a property.
It’s has been an open question whether homeowners would be willing to pay for the convenience of selling to an iBuyer in a housing market where prospective buyers are crowding into open houses and bidding above the asking price. But both Opendoor and Zillow are ramping up acquisitions.
Read more: Cerberus Leads Wall Street Landlords Finding Hidden Homes to Buy
Opendoor went public last year through a merger with a blank-check company led by Chamath Palihapitiya. It reported a net loss of $144 million for the quarter, better than the $200 million loss analysts expected. The company predicted that it would generate roughly $1.9 billion in revenue during the third quarter, up from $1.2 billion in the three months ending in June.
Shares had slipped 36% this year through Wednesday’s close.
©2021 Bloomberg L.P.