I’ve written about Opendoor.com a few times. As far as I can tell, they are the furthest ahead in terms of disrupting the residential real estate market. So I like to follow them quite closely.
They’ve recently launched some new features, so I figured it would be a good time to check-in on what they’re up to. But first – for those of you might not be familiar with Opendoor – here’s what they do.
Opendoor offers instant liquidity to homeowners by buying homes site unseen. The fee they charge seems to amount to less than 10% of the value of the home.
They also say that they typically offer prices that are about 1-3% less than the market value of the home 3 months into the future. (Apparently 3 months is the average time-on-market for the cities in which they operate.)
Once they’ve bought the home, they then make improvements and put it back on the market. As of today, they are buying about 10 homes a day in the two markets in which they operate (Phoenix and Dallas). They are spending about
I’ve written about Opendoor.com a few times. As far as I can tell, they are the furthest ahead in terms of disrupting the residential real estate market. So I like to follow them quite closely.
They’ve recently launched some new features, so I figured it would be a good time to check-in on what they’re up to. But first – for those of you might not be familiar with Opendoor – here’s what they do.
Opendoor offers instant liquidity to homeowners by buying homes site unseen. The fee they charge seems to amount to less than 10% of the value of the home.
They also say that they typically offer prices that are about 1-3% less than the market value of the home 3 months into the future. (Apparently 3 months is the average time-on-market for the cities in which they operate.)
Once they’ve bought the home, they then make improvements and put it back on the market. As of today, they are buying about 10 homes a day in the two markets in which they operate (Phoenix and Dallas). They are spending about
To mitigate their risk, they won’t buy a home built before 1960, a home that was pre-fabricated, a home with a solar lease, and so on. They also stick to values that are between $100,000 to $600,000. But apparently this covers off about 90% of homes in the United States. (You can read their full FAQ here.)
What’s fascinating about all of this is that they are starting to create a seamless marketplace. As they continue to buy more homes (and aggregate supply), more buyers are starting to come to their marketplace. They also allow people to easily find local contractors.
Over time as they gain scale and as their algorithms improve, one could imagine their pricing becoming more competitive, them taking more of the market, and them bearing much less market risk as homes quickly trade.
They liken their model to car trade-ins. Apparently 60% of people who buy a new car are trading in an old one. That’s an interesting comparison that I hadn’t thought about before.
First, they are offering a 30 day full refund on new home purchases. In other words, if you buy a home through their platform and, for whatever reason, you end up not liking it, they’ll buy it back (minus some transaction costs and so on).
Second, they are providing a 180-point inspection report to buyers and if anything breaks in the first two years of ownership (presumably it is something that contravenes the inspection), they’ll come and fix it.
These additions are helpful because it starts to target buyers, which will help them fill out the other side of their marketplace. It also promotes greater transparency because now they’re partially on the hook for the home’s performance.
I like what they are doing and, again, I can’t think of any other company making such big bets in this space.
Following the lead of San Francisco, a new non-profit, member-supported organization for New York tech companies has just launched. It’s called Tech:NYC. Here are their goals, taken from this blog post:
Tech:NYC’s primary goals are to support the growth of the technology sector in New York City, to increase civic engagement by leaders of the New York tech community, and advocate for policies that will attract tech talent, jobs, and opportunity to NYC.
Tech:NYC will advocate for policies that: 1) underscore a regulatory environment that supports the growth of technology companies and technology talent in NYC; 2) promote inclusivity; and 3) ensure access for all New Yorkers to connectivity, technology tools, and training.
What makes something like this important is that many public policy issues are now rooted in the tech sector. Think about all the debate regarding ride-sharing, home-sharing, drone regulation, contract employees, and so on.
But what is also clear is that many cities are struggling to deal with these issues. As I’ve argued before, just saying no to innovation that doesn’t fit neatly into our currently regulatory boxes is often shortsighted.
So how do we put in place policies that deliver the right results and that are balanced? How do we grow the tech base while at the same time managing the disruptive fallout? That’s what this group hopes to do.
And it strikes me that every big city could likely benefit from an organization like this.
Groceries have relatively low online penetration, which makes them great for brick-and-mortar retailers. I’ve written about this topic before in the context of big box stores and online shopping. But I clearly didn’t realize that it had become such a big segment for Walmart.
What’s also noteworthy about grocery shopping though, is that customers appear to be less likely to travel far distances for it, even for lower prices. This means that the radial impact of Walmart the supermarket is less significant and far tighter (~2 miles) than Walmart the discount store. Click here for that study.
This is important because a big catchment area has been central to the Walmart model. They consume cheap land on the outskirts of cities and then offload the transportation costs (indirect costs) to consumers in exchange for everyday low prices (direct costs). Studies show that we, consumers, typically undervalue indirect costs.
Charlie argues in his post that this does not mean that we should write off big box retailing. And I would agree. The Walmart Express concept may have failed, but they are clearly looking for ways to rethink their model. Urban stores will need to form part of that.
To mitigate their risk, they won’t buy a home built before 1960, a home that was pre-fabricated, a home with a solar lease, and so on. They also stick to values that are between $100,000 to $600,000. But apparently this covers off about 90% of homes in the United States. (You can read their full FAQ here.)
What’s fascinating about all of this is that they are starting to create a seamless marketplace. As they continue to buy more homes (and aggregate supply), more buyers are starting to come to their marketplace. They also allow people to easily find local contractors.
Over time as they gain scale and as their algorithms improve, one could imagine their pricing becoming more competitive, them taking more of the market, and them bearing much less market risk as homes quickly trade.
They liken their model to car trade-ins. Apparently 60% of people who buy a new car are trading in an old one. That’s an interesting comparison that I hadn’t thought about before.
First, they are offering a 30 day full refund on new home purchases. In other words, if you buy a home through their platform and, for whatever reason, you end up not liking it, they’ll buy it back (minus some transaction costs and so on).
Second, they are providing a 180-point inspection report to buyers and if anything breaks in the first two years of ownership (presumably it is something that contravenes the inspection), they’ll come and fix it.
These additions are helpful because it starts to target buyers, which will help them fill out the other side of their marketplace. It also promotes greater transparency because now they’re partially on the hook for the home’s performance.
I like what they are doing and, again, I can’t think of any other company making such big bets in this space.
Following the lead of San Francisco, a new non-profit, member-supported organization for New York tech companies has just launched. It’s called Tech:NYC. Here are their goals, taken from this blog post:
Tech:NYC’s primary goals are to support the growth of the technology sector in New York City, to increase civic engagement by leaders of the New York tech community, and advocate for policies that will attract tech talent, jobs, and opportunity to NYC.
Tech:NYC will advocate for policies that: 1) underscore a regulatory environment that supports the growth of technology companies and technology talent in NYC; 2) promote inclusivity; and 3) ensure access for all New Yorkers to connectivity, technology tools, and training.
What makes something like this important is that many public policy issues are now rooted in the tech sector. Think about all the debate regarding ride-sharing, home-sharing, drone regulation, contract employees, and so on.
But what is also clear is that many cities are struggling to deal with these issues. As I’ve argued before, just saying no to innovation that doesn’t fit neatly into our currently regulatory boxes is often shortsighted.
So how do we put in place policies that deliver the right results and that are balanced? How do we grow the tech base while at the same time managing the disruptive fallout? That’s what this group hopes to do.
And it strikes me that every big city could likely benefit from an organization like this.
Groceries have relatively low online penetration, which makes them great for brick-and-mortar retailers. I’ve written about this topic before in the context of big box stores and online shopping. But I clearly didn’t realize that it had become such a big segment for Walmart.
What’s also noteworthy about grocery shopping though, is that customers appear to be less likely to travel far distances for it, even for lower prices. This means that the radial impact of Walmart the supermarket is less significant and far tighter (~2 miles) than Walmart the discount store. Click here for that study.
This is important because a big catchment area has been central to the Walmart model. They consume cheap land on the outskirts of cities and then offload the transportation costs (indirect costs) to consumers in exchange for everyday low prices (direct costs). Studies show that we, consumers, typically undervalue indirect costs.
Charlie argues in his post that this does not mean that we should write off big box retailing. And I would agree. The Walmart Express concept may have failed, but they are clearly looking for ways to rethink their model. Urban stores will need to form part of that.
