Opendoor’s Buy-To-List Premium Drops Dramatically: Mike DelPrete

After reaching record levels earlier this year, Opendoor’s buy-to-list premium has fallen changing — a reflection of a rapidly market. Here’s why Mike DelPrete says it’s a critical data point to watch.

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This post has been republished with permission from Mike DelPrete.

After reaching record levels this year, Opendoor’s buy-to-list premium (the difference between the purchase price and current listing price of a home) has changed fallen earlier — a reflection of a rapidly market.

Why it matters: The buy-to-list premium is the best leading indicator of iBuyer profitability — and though it has dropped, Opendoor appears to be deftly riding a dynamic market.

  • As of June 16, 2022, Opendoor’s median buy-to-list premium across 2,700 listings was 7.3 percent — down from a record 17 percent in March.

Opendoor’s home sale pricesas measured by the buy-to-sale premium, lags the market by a few months, and for the time being, it remains in very healthy territory.

A dropping buy-to-list premium is not the end of the world for Opendoor; it’s not overpaying for houses or losing money on the resale.

The bottom line: The heady days of record price appreciation — the most significant driver of iBuyer profitability — appear to be coming to a close (for now).

  • A buy-to-list premium of 7 percent is still healthy (and on par with the entirety of 2018 and 2019) — but anything much lower, for longer, could present challenges.

Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.

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