After a brief interlude last year, iBuyers are back in a big way. The iBuyers have bought more houses, at higher prices, in Q2 2021 than in any other quarter. Opendoor purchased more houses in the past three months than in all of 2020.

For anyone concerned that the iBuyer model wouldn't be popular in a seller's market, the evidence shows that it is resonating with consumers more than ever, and market conditions are in fact fueling its growth.

$350k is the new $250k

iBuyers are paying more for houses than ever before. The median purchase price of a home bought by Opendoor, Zillow, and Offerpad climbed to $350k in May, up from a steady-state median of $250k for the past several years (the iBuyer "sweet spot").

The iBuyers are still generally purchasing the same types of houses, they're just worth a lot more (+40%) due to the hot housing market. The median iBuyer purchase price closely tracks that of the overall U.S. market.

A more granular analysis shows dramatic shifts in price distribution. In the past 18 months, the percentage of homes purchased by iBuyers under $250k has plummeted from 55 to 13 percent, while the percentage of homes purchased for more than $500k has jumped from 3 to 24 percent.

This is a significant shift in the underlying economics of iBuying that affects revenues, gross profit, financing, inventory value, and more. For example, in Q1 2020 Opendoor sold around 5,000 homes. At an average of $250k each, that's around $1.2 billion in revenue. But at an average of $350k, revenue would be $1.7 billion -- a 40 percent increase driven by home values alone, and not volume.

The iBuyers will have blow-out quarters with record revenues, driven by high purchase and sale volumes and the rise in home values. iBuying is back in a big way.

A Note on Data Sources

The data above is sourced from national public property records. There is a timing delay, which means the June numbers may be slightly high or low. But the difference shouldn't take away from the major narrative of record volumes for the quarter.