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Opendoor is struggling in Sacramento

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Since the market changed, Opendoor has suffered heavy losses in Sacramento recently. I’ve been getting so many questions about them that I thought it would be interesting to take a look at their activities over the past few months. Not really. It’s an objective analysis that helps you analyze what’s going on. Please enjoy it.

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Market changes haven’t been kind to opening the doors:

Looking at the Opendoor listing and the current pending listing, it’s clear that Sacramento has been struggling over the past few months. the market has shiftedI think the public and the real estate community are in tune with this as we have seen many properties listed below the purchase price. On average, the current list price is about $12,000 less than the purchase price. This doesn’t seem like much, but it doesn’t even include future real estate fees, credit offered to buyers, cost of improvements, additional markdowns, etc. % of current actives is the acquisition price. listed under.

A table displaying stats from the current list of Opendoors in the Sacramento area

Observing an open door:

  • Before the market shift, the company was doing much better (see below).
  • Opendoor had some unicorns that were able to sell for significantly more after buying from their owners. The largest difference in the last few months was $192,000 between acquisition and resale. This meant that a small number of owners sold for far below market value.
  • Their closed sale was on the market about 40 days longer compared to other sales in the area.
  • median fell About $40,000 since May This was tough on Opendoor’s profitability.
  • Opendoor regularly offers higher markdowns compared to other markets.
  • Opendoor has been struggling to get offers on its listings, but seems to be recovering. For example, a few weeks ago 83% of the properties on the market were active, and now he is at 71%, given that more properties are signing contracts.
  • Flipper, a family business, cannot afford such losses, but a tech company with huge financial backing may be able to turn around.

recent losses

Below is a sample of Opendoor listings currently active in the Sacramento area. We currently have about 250 active listings and this portion represents the trend.

A sample of Opendoor properties in the Sacramento area (this chart shows profit and loss comparing acquisition price to current listing price)

Active list:

Here’s another way to see the Opendoor list. Anything above the zero percent line appears above the acquisition price, while anything below it is below the current acquisition price.

Let's take a look at the profit and loss potential of Opendoor listings.This usually shows how low it is compared to the purchase price

Travis Wright’s graph:

Shared Opendoor data Travis Wright, I know from Twitter. I asked him if he wanted to contribute to this post and he said yes. So what Travis came up with was to help show market trends and the days when potential profitability declined over time. These visuals are return potential as they divide the closed sale price into the acquisition price. In other words, the images do not take into account real estate fees, credits, holding costs, repair costs, etc. Thanks Travis.

OPENDOOR improved before the market shifted.

Considering sales since May, on average Opendoor has outperformed its acquisition price by about $25,000. Does this mean they were making a profit? Well, without knowing their numbers it’s hard to talk about it. increase. What really stands out to me is the average number of days from acquisition to closing is 155 days. This means Opendoor has owned the property for about five months. If anyone has specific insights on profitability, please comment below.

Opendoor Closed Sales Data (table with lots of nuggets)

Closing Sale:

Let’s take a look at the difference between the acquisition price and the closing price of the buying and selling from May to August so far.this looks quite different Compared to what is currently happening with their listing. Those above the zero line represent properties that were sold above their purchase price. Again, this doesn’t automatically mean the company was profitable.

OPENDOOR STAYS LONG ON THE MARKET

Over the past few months, properties in the region have taken an average of 18 days to close, while open door properties have taken an average of 59 days. Some wonder if staying on the list too long is a marketing ploy to keep the sign in the yard too long. In a rising market where value could catch up with higher listing prices, I suspect listing at higher levels might have worked a little easier.In today’s changing market with less demand Will it work? Let’s see.

At the end:

Opendoor has been trying to crack the code, and the market shifts in recent months have been a monkey wrench for their operations, to say the least.Median Down over 6% from May In the Sacramento area (around $40,000), this kind of market shift hit at least Opendoor’s current holdings hard.

It’s easy to bait Opendoor because it’s trying to challenge the traditional model, but they’ve recently partnered with Zillow and spent a lot of money on marketing, so I’m not going to deny it just yet. A free-to-use green screen. actually, Mike Delprete says “Opendoor’s ad spend has skyrocketed this year, making it more in the first six months of 2022 than it did all of last year.” is widely known to have lost I’m just saying that the future hasn’t happened yet, so it’s important to watch.

Are things starting to change? Opendoor has been struggling to close deals, but seems to be starting to attract more buyers to its listings. number is 71%. Are there any discounts? Or the $3,500 incentive announced a few weeks ago?

Let’s keep watching. Keep reporting stats and outlook. If this post goes well, I’d love to follow up again.

Means:

  1. Mike Delprete We give you the best iBuyer data. I highly recommend subscribing to his blog. Mike was kind enough to exchange emails with me this week. Here is his latest story (WTF 2022).
  2. Tyler Okland We publish many Opendoor analyzes. In fact, he recently wrote: Opendoor struggles in PhoenixI follow him on Twitter, and a few weeks ago Tyler declared that Opendoor’s numbers were lackluster in Sacramento.

Hope this helps.

Market statistics: Stay tuned as we will be releasing more market stats on our social channels this week. twitter, Instagram, LinkedInWhen Facebook.

Thank you for being here.

question: What stands out most about Opendoor? What did I miss? Anything else to add?

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