If you recall, the largest buyer of single-family houses in the US last year was Opendoor. This is according to SFR Analytics. Opendoor is a so-called iBuyer, meaning they provide cash offers to sellers, close quickly, and then turnaround and sell each home for — hopefully — a profit. They also collect commissions, and make money in other ways (such as through home loans).

This process seemed to be working reasonably well up until 2022, but then the market turned. They then quickly discovered that they couldn't sell their homes for a profit and so they ramped down acquisitions. Here's a chart from another post by SFR Analytics showing the fall off in purchase volume in the second half of 2022:

The worst performing market at this time was Phoenix, which apparently accounted for around 50% of the company's losses. In some cases, their gross margins were -$60,000 per property. But once they recalibrated their models (I'm just assuming this is what they did), they were able to regain positive unit economics. Here's Phoenix starting from their January 2023 cohort:

Opendoor has not done well as a public company. But it is the biggest buyer of single-family houses and it seems to be back to positive gross margins. Maybe that's something.

Charts from SFR Analytics; cover photo by Chris Tingom on Unsplash