A weekend topic starting with Vice. “Zillow is doing a $450 million bond deal to get the money it needs. Opendoor went public to scale as quickly as it can. Even Rocket Homes is getting into the action. The race is on among tech firms to gobble up U.S. housing stock and dominate the increasingly competitive high-tech house-flipping market, otherwise known as the fast-growing ‘iBuyer’ industry.”

“‘There’s almost an arms race to get the most inventory possible,’ said Daren Blomquist, vice president of market economics at Auction.com, who described the state of the iBuyer market as ‘almost frenzied.’ ‘It’s less about making money off that inventory, at least initially, and more about who can get the most inventory the fastest.’”

“Mike DelPrete, a scholar-in-residence at the University of Colorado Boulder who studies the iBuyer market, found that iBuyers have recently shifted ‘to a free-for-all, acquire at any cost strategy.’ At present, both Opendoor and Zillow’s homes division are losing money in the process.”

“After going public last year, Opendoor has now expanded into more than 40 markets and purchased 8,500 homes in the second quarter, more than any other quarter by almost 50%. The company, which is reportedly searching out a new $2 billion revolving credit facility, also announced this week that it is now willing to purchase the majority of homes in every one of its current markets.”

“Zillow announced similarly ambitious plans during its recent earnings call. While it bought only 3,800 homes in the second quarter, Zillow is gearing up to scale massively through the rest of 2021, saying that it expects its Homes division to bring in around $1.4-1.5 billion in revenue next quarter, roughly double what the division made this quarter.”

“To finance the growth, Zillow is borrowing $450 million through a bond deal to be able to buy and sell more homes—the first such deal of its kind, according to Bloomberg. (The original deal was for $300 million, but due to investors’ interest in getting in on the U.S. housing bonanza, Zillow reportedly increased its size.)”

From AZ Big Media. “The share of homes for sale with a price drop rose for the fifteenth consecutive week to 4.9%, according to Redfin. Home sellers are also beginning to notice that the market is no longer heating up, and buyers are seeing that homes are staying on the market a little longer—a median 17 days—as more homeowners are listing their homes and at more realistic prices.”

“Asking prices have eased back to where they were in May, and while they are still being bid up half of the time, homes are selling for less of a premium above list price than they were last month. Overall, the market is becoming more balanced and following typical seasonal trends.”

“‘For the first time in over a year, homebuyers don’t need to feel rushed,’ said Redfin Chief Economist Daryl Fairweather. ‘Although the market still feels tight and competitive, the number of homes for sale keeps creeping up as more homes are listed. Those home sellers are adjusting their price expectations or seeing their homes sit on the market. There could be even more listings coming on the market as mortgage forbearance ends and homeowners with missed payments decide to sell.’”

A reader sent this in: “I stumbled across something I thought you would be interested in. On Zillow.com, I searched for Zillow-owned properties for sale by selecting the filter ‘Zillow Owned?’ under the ‘more’ button. By selecting this, I removed all other listings so it would only display the Zillow-owned properties.”

“After doing so, I began selecting properties on the map. More times than not, the property was substantially reduced. I then selected ‘price and tax history’ on the property and I could clearly see Zillow was either willing to take a loss or is willing to run an extremely tight profit margin on the majority of their Zillow-owned properties.”

“Here’s an example of what I checked out in Denver; 7637 E Mineral Dr, Centennial CO  80112. After you go to this page, click on or scroll to ‘price and tax history.’ You can clearly see the narrow spread Zillow is willing to take. And go figure, the properties are being listed for less than their ‘Z estimates.’ FYI- I have searched for properties on Opendoor.com and looked at their Zillow or Realtor.com listing and have also noticed they are reducing the prices of their listings by substantial amounts as well.”