First Zillow, Now OpenDoor? Is iBuying Doomed?
Last November, Zillow Group (NASDAQ: Z)(NASDAQ: ZG), the largest online real estate platform, abruptly announced its plan to exit iBuying. Its nearly four-year run in the business resulted in hundreds of millions of dollars in losses for the company.
Now it seems the largest iBuyer in the industry, Opendoor (NASDAQ: OPEN), may be following in Zillow's footsteps for losses. A recent report from YipitData shared the company incurred losses on 42% of the homes sold in August 2022. Is this a sign that Opendoor and the iBuying business model are doomed? Let's take a look and see.
OpenDoor's second-quarter earnings shared that the company could see as much as $175 million in losses in the third quarter of 2022. Rising interest rates have dramatically cooled home buyer demand and, in turn, caused housing prices to retreat.
Source Fool.com
