Home News Real estate investment companies selling Phoenix metro homes for $100,000 less than what they paid

Real estate investment companies selling Phoenix metro homes for $100,000 less than what they paid

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Phoenix (3TV/CBS 5) – in the Phoenix metropolitan area headed the country Housing prices have risen for about three years in a row.

In June 2020, Valley homes sold for an average of $368,000. It jumps to $508,000 in 2021. This year his June average selling price was a whopping $591,000. However, the Phoenix real estate market has undergone dramatic changes. “Suddenly, prices were going up and up. And interest rates started going up. And things started slowing down,” said John Sposato, a real estate agent who has been in business for more than 30 years. .

Sposato said the slowdown took iBuyers by surprise. iBuyers are popular homebuyers such as Offerpad and Open Door. You’ve seen their TV commercials. Sposato said he thinks iBuyer’s business model, like Opendoor, should be concerned that it “won’t work.” Sposato frequently posts on TikTok that he says the iBuying company is financially in the red. He may have a point.

In April, when the property market began to shift downwards, On Your Side learned that Open Door had purchased a North Phoenix home for $710,000 and put it up for sale for $753,000 for an immediate profit. rice field. In just five months, the same company lowered the sale price of the same house eight times. This was only to attract buyers in the new real estate environment. The same house is now on the market for $584,000. If sold for that amount, Open Door would lose her $126,000. Sposato thinks the house could probably be sold at a lower price.

Open Door has more than 1,500 Valley homes for sale, which Sposato said means there’s a lot of money left on the table. “They paid $X for a home from February to May, and now they realize it. The company said it was aware of market changes but was not worried. One of his Open Door executives said that overall profits are averaging on the “upside” and that as long as it doesn’t go into the red, he’s happy. The company says it views home investments as if they were his 401-K.

Another iBuyer company, Offerpad, also said it wasn’t concerned, despite offering incentives to attract buyers. JR Samsung is Vice President of Offerpad Home Loans. he said: In the second year he is 4.99%, in the third year he is 5.99%. As for Zillow, the company said he pulled out of the iBuying business already in November 2021. Sposato said: They want to free up capital. ”

Sposato and other Valley real estate experts think iBuyers are desperate. They believe companies are investing too much money in too many homes and need to get out. Their dilemma is good news for potential homebuyers looking for the ideal bargain. “I mean there’s a deal to have there. They’ve got to get rid of these homes — open doors and offer pads,” Sposato said. We are trading.”

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