Zillow had led a trend of corporate purchases of real estate, followed by Redfin and Opendoor. Zillow has since gotten out of the business but there are still companies that will buy a house cash from a seller at their set price.
While it may seem that the average Joe looking to buy a house would have trouble competing for a home against a large corporation, Lending Tree Senior Executive Economist Jacob Channel says it can actually be a good thing. “Ultimately it’s sort of mixed. There are going to be instances where it’s going to be a little bit better for an average Joe but instances where an average Joe might have preferred if they could sell to a company,” he tells KTRH News. It can be a win-win in the right situation.
However as Zillow has stopped their iBuying business, others continuing at a scaled back rate. “Following Zillow’s big dramatic exit from that market, it’s not happening at nearly the same level that it was,” says Channel, suggesting a decline year to year but also within the past six months.
Some of those companies have moved into the renting market with properties they’ve purchased, and that could affect the average Joe, who could see higher rent prices as a result and corporate heft to eviction levels.
The 2008 economic recession began as a house buying problem, so with inflation high and real estate still a seller’s paradise, economists are watching the numbers.
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