Have you heard of iBuying in the housing market?
“In principle, iBuying simply means I go online and I want to sell my house. And somebody is willing to buy it off of my hands for cash quickly," finance professor Gregor Matvos says.
And it happens quickly, because it's driven by an algorithm.
Zillow had huge hopes for iBuying — quickly scooping up thousands of homes in all cash deals. But the algorithm misread the market, and Zillow's project tanked.
But they're not the only ones in iBuying business. There's Opendoor, and Redfin:
“We would never just have a computer algorithm determine what your home is worth, because it could have a problem with the foundation, something that's really hard to fix," Redfin's CEO Glenn Kelman says.
Today, On Point: All cash, high speed, supposedly high efficiency. Algorithmic home-buying and how it could change real estate.
Gregor Matvos, professor and chair in finance at Northwestern University's Kellogg School of Management. Research associate in the Corporate Finance Program at the National Bureau of Economic Research.
Jeff Meyers, CEO of Zonda, a data intelligence company that informs, advises and connects housing industry experts.
Glenn Kelman, CEO of Redfin. (@glennkelman)
Rachel Quednau, program director of Strong Towns. (@StrongTowns)
Source : https://www.wbur.org/onpoint/2021/11/12/red-hot-housing-market-broke-ai-home-buying-zillow-redfin300