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More iBuyer Job Cuts as Arizona Housing Market Cools

By November 11, 2022January 17th, 2023No Comments

By Angela Gonzales | Phoenix Business Journal

About 2,000 homes in metro Phoenix are owned by the so-called iBuyers, representing a $2 billion investment, according to New York City data analytics firm Parcl Labs.

The term iBuyers refers to companies that use tech-focused programs to buy and sell houses quickly.

“If iBuyers sold their active inventory at current asking, they would lock in $90 million in losses relative to their original purchase prices,” Parcl Labs co-founder Jason Lewris said.

Based on what he knows about October sales right now, it could be the worst month in a decade for inventory turnover ratio in Phoenix, he said. The inventory ratio divides the number of sales into total units.

Lewris said he is seeing iBuyers changing the prices of active inventory every two weeks in metro Phoenix.

“As more pressure builds for iBuyers to exit their positions, they will likely become more aggressive in their pricing,” Lewris said. “This will continue a downward spiral until prices reach a point where demand enters to stabilize it.”

For iBuyers in Arizona, the trend has meant workforce cuts.

Redfin Corp. as the latest to announce layoffs, this week saying it will lay off 13% of its staff and shutter its home-flipping business, following Opendoor Technologies Inc.’s 18% workforce cut totaling 550 people.

Chandler-based Offerpad Solutions Inc., cut 7% of its staff in September, said Stefanie Layton, the company’s vice president of investor relations.

Zillow Group Inc. also recently had layoffs, letting 300 people go two weeks ago. That’s after laying off 25% of its workforce about this time last year.

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