RALEIGH – Home sellers in the Triangle now have another option in the competitive real estate market.
Today, Zillow Offers began writing all-cash offers to acquire property in and around Raleigh. It’s the second market for the Seattle-based company in North Carolina. Zillow Offers launched in Charlotte in December 2018. Raleigh is the sixth market nationwide, along with Atlanta, Denver, Las Vegas, and Phoenix.
Zillow Offers joins Knock, Opendoor, Offerpad, and Ribbon as real estate startups that have opened up operations in Charlotte and in Raleigh within the past 12 months.
“Many homeowners are trying to time the sale of their home with the purchase of a new one,” said Jeremy Wacksman, president of the Zillow Group. “Falling inventory in Raleigh can make finding that new home on a tight deadline even more stressful.”
In fact, according to data from Zillow, 61 percent of sellers are also buying a new home at the same time as closing on their current residence.
According to the company, Zillow still plans to work with local brokers and agents during each transaction. Those agents and brokers will receive a commission on each transaction. For the Triangle, Dash Realty Group will represent Zillow in every real estate transaction.
Is it home flipping?
According to a study released last week by Realtor.com, the two housing markets where home flipping increased the most between the third quarter of 2017 and the third quarter of 2018 are the two locations where Zillow and multiple other technology-enabled real estate startups launched: Raleigh and Charlotte.
“We’re not flipping homes,” said Emily Heffter, communications director at the Zillow Group. “Home flipping includes getting a home at a discount and banking on housing market appreciation to make a profit.”
The study looked at home sales in the largest 200 metropolitan statistical areas (MSAs) in July, August, and September of 2018 and compared them with sales in the same quarter the year prior. It defined a home flip as any type of home bought and resold within a three-to 12-month period, and it only included homes that sold for more than the original purchase price and omitted homes that were in foreclosure.
In Raleigh, the study tracked an increase of 63.4 percent in homes that were purchased and then resold at a higher list price between three and 12 months after the closing date of the initial sale.
In the Queen City, the increase was measured to be 42.5 percent.
No other MSA saw a more than 40 percent increase: other top-five markets were Orlando, Florida (37.1 percent); Phoenix, Arizona (35.7 percent); and Las Vegas, Nevada (33.7 percent).
“We buy our customer’s new home for them before we prep and sell their old home on the open market,” said Sean Black, co-founder and CEO of Knock, which also operates in Raleigh and in Charlotte. “We are not buying their old home from them and reselling it at a higher price like those defined in the report.”
A recent ATTOM Data Solutions study found that nearly one in 10 homes purchased and resold by iBuyers – which ATTOM defines as companies that buy directly from homeowners via all-cash offers – were purchased by institutional investors in the first 10 months of 2018.
“iBuyers that are buying homes directly from consumers and reselling them at a higher price could certainly be influencing the findings,” said Black, after reviewing the report from Realtor.com. Raleigh and Charlotte continue to be highly competitive according to the company’s Knock Deals Forecast and see price increases, said Black, and highly competitive markets often attract additional iBuyers and institutional investors.