After a brutal Q3 in a rapidly shifting market, Opendoor has significantly slowed down its pace of home acquisitions.

Why it matters: Profitable or not, an iBuyer must buy homes to generate revenue and remain relevant.

• Opendoor's drop in purchase volume was rapid and extreme, but not dissimilar to changes in the past.

• Opendoor has demonstrated an ability to quickly ramp up and down -- a sensible feature, and not a bug, of iBuying.

Lower purchase volumes mean less homes coming to market, resulting in fewer sales generating less revenue.

But Opendoor's bigger challenge is being able to resell its homes for a profit.

• It's difficult to imagine a sustainable business model selling homes for less than it bought them for, regardless of fee.
   

• The rubber hits the road with Opendoor's buy-to-sale premium, and the following chart from Datadoor.io shows that, improving purchase cohorts or not, Opendoor continues to sell homes at a loss.

A four year view of the same buy-to-sale premium, this time from YipitData, shows that Opendoor is well and truly in uncharted territory (and not in a good way).

What to watch: With a rapidly changing market, reeling from unprecedented financial losses, and operating under new leadership, Opendoor is undergoing a transformative moment in its history.

• It appears to be buying fewer homes while shifting towards more asset-light models, such as Opendoor Exclusives and Power Buying (Buy with Opendoor and Opendoor Complete).
   

• All of which raises an interesting side question: If Opendoor is buying significantly fewer homes and is guiding more consumers to its Power Buyer products, why would Zillow want to partner with them?

The bottom line: Homes are the fuel that powers the Opendoor machine.

• As Opendoor dramatically slows down its purchase of homes, it will lose less money — but it also loses its ability to make money.
   

• Think about it: If a coffee shop loses money on each coffee it sells, the solution is not to sell less coffee; it’s figuring out a way to sell coffee profitably.