Opendoor Currently Holds 17,733 properties across the US

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Opendoor Currently Holds 17,733 properties across the US

Tim G.
Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes

I've been watching Opendoor since almost selling a home to them last year, they backed out at the last minute from an offer so crazy I felt certain their future was already written. I ended up selling the deal to Redfin instead (netting $160k in two months of ownership but $60k below Opendoors offer). Since then I've been tracking their inventory, while they are down from 19k homes over the summer... they look to be in deep trouble. 


Please keep in mind when you see a sold number on public records, Opendoor likely paid 6-10% below that number after they deduct various fees from the transaction. This point seems to be missed in most cases when referencing the prices paid for homes by Zillow, Redfin and Opendoor. 

Here are some details on the markets with large holdings.

Arizona (2,331) 

Texas (4,355)

Florida (2,404)

California (1,578)

Several of these markets have strong new construction inventory coming to market... this looks dangerous. Please be careful out there friends. 

Source: Property Radar

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Chris Webb
Investor · Central Virginia · Member since 2020 · 394 posts · 253 votes
3y

I curious why this matters? NAR has 700K listings nationally (pulled today from realtor.com), even if all 17,733 were on the market it would be less than 3 % of total listings on the market.

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    3y

    I don't get it. That is a ton going down the toilet! 

    0Reply
  • Rob Chiang
    Rental Property Investor · San Mateo, CA · Member since 2017 · 108 posts · 49 votes
    3y

    wow, where do you see that list, in California?

    0Reply
  • Tim G.
    OP
    Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    3y
    Quote from @Rob Chiang:

    wow, where do you see that list, in California?


     I used property radar, just set the state and set owner name as "opendoor property trust"

    The California list is especially sad, the cities they own homes will be some of the hardest hit in this downturn (Menifee, Lancaster, Hemet etc...)

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  • Chris Webb
    Investor · Central Virginia · Member since 2020 · 394 posts · 253 votes
    3y

    I curious why this matters? NAR has 700K listings nationally (pulled today from realtor.com), even if all 17,733 were on the market it would be less than 3 % of total listings on the market.

    1Reply
  • Solomon Floyd
    TX · Member since 2022 · 56 posts · 25 votes
    3y
    Quote from @Chris Webb:

    I curious why this matters? NAR has 700K listings nationally (pulled today from realtor.com), even if all 17,733 were on the market it would be less than 3 % of total listings on the market.


    I agree with you, while it's a solid number of homes the overall affect on the market is minimal. When you factor that most of their homes are owned in primary and secondary markets its a blip on the radar. It makes sense that OpendDoor is selling off homes, why hold on to inventory when you can offload it with steep seller discounts?

    1Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    3y

    This just came out today here in Denver. It's behind a paywall, but you can see the headline: https://businessden.com/2022/1...

    They continue to get hammered. What happens when their $$$ dries up... What's the monthly nut on 17k homes??? Don't forget about winterization, etc. 

    1Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    3y

    @Matt M.

    Your post was timely. 

    Opendoor looks like toast. I posted what I see regarding Opendoor on this BP post. I think they have the potential to turn it around, but last quarter was brutal and I'm uncertain if their management can save it. They just laid off 18% of their workforce. Their stock is 95% off its peak 22 months ago. In my market they really can't do much about their inventory other than sacrifice margin, which will cause more pain in 2023Q1 and maybe 2023Q2. Tough spot for them. And I'm in a GOOD market, relatively speaking! I'm bearish. 

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  • Drew C Grossman
    Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
    3y

    It was an interesting time when the i-buyers borrowed 100’s of millions of dollars at 3% rates and could make any number work. 2400 alone in Florida from open dooor..!!! That’s crazy..and you know that overpaid. I do think that they will be able to sit on a lot of these single family properties even if they lose money in short term, especially when you have huge companies/ funds saying they have committed massive amounts of money to single family houses in markets across the US. I think a lot of markets have a lot more downside and some other markets are a little more shielded but it will be interesting to see the dynamic! In the end I’m just here for the ride!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3y
    Quote from @Drew C Grossman:

    It was an interesting time when the i-buyers borrowed 100’s of millions of dollars at 3% rates and could make any number work. 2400 alone in Florida from open dooor..!!! That’s crazy..and you know that overpaid. I do think that they will be able to sit on a lot of these single family properties even if they lose money in short term, especially when you have huge companies/ funds saying they have committed massive amounts of money to single family houses in markets across the US. I think a lot of markets have a lot more downside and some other markets are a little more shielded but it will be interesting to see the dynamic! In the end I’m just here for the ride!


    my experience with these companies on properties i own is they were just like typical wholesalers low balling the heck out the deal.. I was never fortunate enough to get one of the high ball offers.
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3y
    Quote from @Chris Martin:

    @Matt M.

    Your post was timely. 

    Opendoor looks like toast. I posted what I see regarding Opendoor on this BP post. I think they have the potential to turn it around, but last quarter was brutal and I'm uncertain if their management can save it. They just laid off 18% of their workforce. Their stock is 95% off its peak 22 months ago. In my market they really can't do much about their inventory other than sacrifice margin, which will cause more pain in 2023Q1 and maybe 2023Q2. Tough spot for them. And I'm in a GOOD market, relatively speaking! I'm bearish. 


    Chris you think BK and liquidate ? 
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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    3y
    Quote from @Jay Hinrichs:
    Quote from @Chris Martin:

    @Matt M.

    Your post was timely. 

    Opendoor looks like toast. I posted what I see regarding Opendoor on this BP post. I think they have the potential to turn it around, but last quarter was brutal and I'm uncertain if their management can save it. They just laid off 18% of their workforce. Their stock is 95% off its peak 22 months ago. In my market they really can't do much about their inventory other than sacrifice margin, which will cause more pain in 2023Q1 and maybe 2023Q2. Tough spot for them. And I'm in a GOOD market, relatively speaking! I'm bearish. 


    Chris you think BK and liquidate ? 

    Too early to tell. Probably not if they can move inventory and they don't violate lending covenants. The 2022Q3 $573M valuation adjustment, IMO, may need to be repeated in Q4 or 2023Q1. Think about it. the $573M adjustment represents a roughly 8.6% markdown on inventory. The company describes the write downs in this page of their SEC filing. If I use Wake County NC as a proxy, from public record (recorder of deeds) I see that they are still taking on new inventory faster than they are selling: 

    Opendoor as: 
                Grantor Grantee
    2022Q1 256      149
    2022Q2 154      238
    2022Q3 132      191
                ---      ---
               542      578

    I don't think the market will rebound in a few months, and it seems like that is the OPEN expectation. NOTE: The new management team may have a different view wrt inventory. I don't know. I do know that I'm glad my portfolio and balance sheet doesn't look like theirs. 

    0Reply
  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    The Broken Promise of the iBuyer - https://www.nar.realtor/magazi...

    "Opendoor is investing in a new program, Opendoor Exclusives, a marketplace for buyers to view off-market homes on a first-come, first-served basis. (Opendoor skirts MLS rules for off-market listings because the company owns its listings.) Homeowners who sell with Opendoor can either request an instant offer or list on Opendoor Exclusives for 14 days to generate buyer interest. Opendoor aims for 30% of its total business to come through the Exclusives marketplace by the end of 2023."

    Here is a great podcast by "On The Market" on the topic called "Why Wall Street Was The Biggest Loser of 2022". Mike DelPrete, the guest on the show, published a comprehensive report on iBuyers in 2022.

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  • Eric FernwoodBusiness Member
    Realtor · Las Vegas, NV · Member since 2014 · 996 posts · 1k+ votes
    3y

    Opendoor, Zillow, and others make the mistake of assuming that a generic set of parameters apply to any specific market. Not true. I will demonstrate this using rental data.

    There are three major tenant pool segments in Las Vegas. The objective was to select a tenant pool segment with desirable behaviors, the most important being remaining in the property for many years. I started with data from national sources. It took over a month for me to realize that national data is almost worthless for a specific location. Once I understood this, I turned to studying Las Vegas historical tenant behaviors.

    I tried different approaches for isolating a segment with the right characteristics, all of which failed. Finally, I plotted the length of tenant stay vs. monthly rent, and it worked. The resulting chart looked similar to the one below.

    My point is that even in a single town, different segments' housing requirements and behaviors are not the same. How is this playing out with Opendoor and others? They assume they can buy any property that fits a national specification and sell it rapidly and at a profit in all markets. This invalid belief is why Zillow failed.

    Instead of assuming that any property that matches their national profile will sell well, they need to look at each market. Then, determine what and where people buy most today and only buy similar properties.

    Real estate is hyperlocal, you need to base all purchase decisions on the current situation in the specific location.

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