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The burgeoning role of iBuyers in the housing market

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  • Michael J. Seiler
  • Liuming Yang

Abstract

We examine the iBuyers’ business model and their impact on housing markets. We find that iBuyers tend to enter neighborhoods that have more easily priced and homogeneous homes, as price discovery is simpler and more consistent with their pricing algorithm in those areas. iBuyers purchase homes at lower prices than individual owner‐occupiers, and this acquisition discount reflects the benefits iBuyers offer to motivated sellers rather than distressed home purchases or unobserved lower‐quality housing characteristics. Last, a greater presence of iBuyers results in a higher volume of local housing transactions and encourages more home sellers to sell without listing.

Suggested Citation

  • Michael J. Seiler & Liuming Yang, 2023. "The burgeoning role of iBuyers in the housing market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(3), pages 721-753, May.
    • Handle: RePEc:bla:reesec:v:51:y:2023:i:3:p:721-753
    DOI: 10.1111/1540-6229.12384
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