Opendoor co-founder Eric Wu stepped down as CEO of the iBuying giant on Thursday, after a year of staggering losses — $928 million in the third quarter alone — and existential doubts about the model, which captured the imagination of venture investors and rattled agents, but has yet to pan out financially. Opendoor’s stock is in the gutter — under $2 a share — and its market cap has fallen from about $18 billion at its peak to just over $1 billion today.
Opendoor, to me, is one of the companies that best epitomizes a thesis I’m obsessed with: the home as a commodity — turning the biggest asset in most Americans’ lives into a standardized, tradeable holding. The company’s challenges speak to the immense complexity of transforming the way that we buy, sell and finance homes.
To help break down what Wu’s resignation means and where iBuying stands today, I reached out to Mike DelPrete, a residential real estate strategist whose columns and analyses of the iBuying space have been required reading.
“iBuying was designed with recessions in mind and cooling housing markets in mind,” he said in a conversation with me Friday. “Like, no problem. But a global pandemic, not so much. What the effect that that has had on the real estate market over the past two years has just been insanity.”
Though the financial opportunity in disrupting residential real estate is massive, the challenges might be even bigger. “Of everything in the world, that’s got to be the hardest thing to commoditize — I’d put that last on my list of industries that are going to get disrupted really quick with technology,” DelPrete said. “There’s more people using agents now than ever before.”
Watch the conversation above, and read more iBuying coverage from TRD here.
Read more
Residential
New York
What the hell is happening in residential real estate?