A recent report on Bloomberg says “Wall Street is losing out” to mom & pop buyers in the current housing slump after they say “big money” spent a fortune snapping up homes. The article talks with several real estate investors in the Phoenix area about their recent purchases and the path that led them there. Interestingly, it points several properties that Opendoor was apparently taking a haircut on after overpaying. Indeed…the quotes below speak volumes:
“In November the Tayriens paid $485,000 for what they call “their forever home.” In June the seller, Opendoor, had paid $646,800. That’s a 25% loss in just five months.”
“The 31-year-old Iraqi immigrant knows the neighborhood well. He got his start in the city as a janitor at Phoenix Sky Harbor International Airport…Now his passion is flipping homes. And he’s quite good at it. He figures he made $200,000 buying and selling them in the two-year pandemic-fueled housing boom.”
“While Opendoor is nursing losses, local flippers sold homes for 20% above their purchase price. They tended to buy distressed properties, though they also generally put more into renovations.”
“Even when it became clear to many local analysts that the market was stalling, the iBuyers and other institutions kept purchasing. In April, the Cromford Report, a Phoenix data firm, put out a “red flag” to its 2,000 subscribers, who are mostly local agents, appraisers and investors. It warned that the slump had already begun.”
Click here to read the full story at Bloomberg.