T3 Insight

Housing affordability, state of real estate AI + the SP 200

Articles in this Edition

In this edition of T3 Insight, T3 Sixty's latest monthly analysis of the residential real estate brokerage industry includes articles on Housing affordability, state of real estate AI + the SP 200. Take a deep dive below.
Released September 22, 2021

A practical solution to housing affordability

by: Jack Miller

The state of AI in real estate

by: Mark Lesswing

Make sure leaders you know are on the SP 200 radar

by: Paul Hagey

What We're Reading

In addition to the articles, here are a few items we are reading from across the internet.

Offerpad goes public

Offerpad became the latest residential real estate brokerage company to go public. Launched in 2015, the iBuyer, which also represents buyers and sellers as a brokerage, went public on the New York Stock Exchange via a merger with Spencer Rascoff’s special acquisition company on September 2. The company began trading at a valuation of $2.7 billion. The company joins its prominent iBuyer competitors – Zillow Offers, Opendoor and RedfinNow – as a public company or a unit under a parent company.

  • HousingWire
Investors and iBuyers purchased a record share of homes in Q2

Institutional investors and iBuyers captured a record share of single-family homes in the second quarter of 2021. These firms accounted for 16.1 percent of all single-family purchases across the nation in that period, approximately double the rate (8.4 percent) a decade ago, according to Redfin data. The tally excludes purchases from smaller, individual investors. This is the highest share for any quarter on record, which goes back to 2000. As iBuyers increase their market share and major private equity-backed companies such as Blackstone Group increase their activity in the single-family space, housing affordability, especially for lower-income buyers, may become a bigger challenge.

  • Washington Post
CRMLS enacts policy for prominent listing broker, agent display

The nation’s largest MLS, CRMLS, which serves over 108,000 subscribers in California, updated its policy in September to require all brokers to prominently display the name and contact info of listing brokers and agents on listings they receive through an IDX feed. Instead of appearing down on listing display pages, brokers must now display that information toward the top. Now that Zillow Group displays listings on its site as a participating broker through IDX feeds, rules like this carry more weight, especially from the nation’s largest MLS. Many portals, including realtor.com, now prominently display listing broker or agent names and contact info. CoStar Group has said it plans to compete by leaning into the industry’s Fair Display Guidelines, of which prominent listing broker or agent display is key component.

  • Inman
Orchard valued at over $1B with latest funding round

IFunder Orchard, which provides brokerage, mortgage and title services to homebuyers and sellers, raised $100 million in a Series D fundraising round. The company provides cash-backed offers on behalf of homeowners buying a new home for a 6 percent fee. The funding indicates the sustained interest and attractiveness of the alternative real estate financing models cropping up, which include iBuyers and a growing number of alternative financing models.

  • HousingWire
NAR to consider policy that increases listing broker, agent attribution

Related to the story above, NAR is considering adopting a policy that will require websites that display listings through IDX feeds from Realtor association-run MLSs to display the contact information for listing agents prominently. Realogy has come out to publicly support the policy. Listing broker and agent attribution has been a conflicting topic for brokerages and agents for many years. Many complained or resented when realtor.com and Zillow.com grew significantly by selling connections to other agents off their listings, but also faced some of the same issues on the listings presented on broker sites throughout their markets. IDX rules have not required prominent listing agent attribution, and this policy looks to change that. With CRMLS’s move, covered above, and large companies such as Realogy supporting the proposed NAR policy, this could be changing now.

  • Inman
HomeLight raises $363M to spur iFunding model

The funding spree for alternative real estate finance models continues with HomeLight’s $363 million funding round. The funding includes $263 million of debt financing that the company says it will use to fund its cash offer service, in which the company makes cash offers on homebuyers’ behalf, and its home trade-in service, in which it helps finance a homeowner’s purchase of a new home and the sale of their existing home. The funding illustrates the intense attention the alternative financing model is receiving and the promise investors think it has.

  • RealTrends
Opendoor goes deeper into home with Pro.com acquisition

Opendoor has acquired two general contracting platforms Pro.com and Skylight and will fold the companies’ teams into its own. The move represents a deepening and expansion of the services Opendoor, and other iBuyers, look to provide real estate consumers. IBuyers are quickly becoming more than just companies who streamline the transaction – they are jumping into the services adjacent to the transaction including mortgage, title and insurance, but also moving, home renovations and more.

  • GeekWire
Pacaso raises $125M led by Vision Fund 2

After raising $75 million in March 2021, Pacaso, the startup run by former Zillow Group execs Spencer Rascoff (chairman) and Austin Allison (CEO) has raised another $125 million, led by SoftBank’s Vision Fund 2. The company streamlines second-home ownership for consumers with a platform that allows them to own shares in properties in 25 second home markets such as Lake Tahoe, Palm Springs, Napa and Malibu in California and Park City, Utah. The firm recently launched its first overseas market in Spain. The firm holds active brokerage licenses in its active markets where it partners with local agents to purchase homes outright or shares in a home. Pacaso debuted its platform just in October 2020 and claims to have an annual revenue run rate of $330 million. The speed with which the startup is growing and raising money epitomizes the current real estate era, is chronicled in detail in the 2022 Swanepoel Trends Report, available for preorder here.

  • TechCrunch
Ribbon Raises $150 Million to Expand Digital Homebuying Platform Nationally

Ribbon, an alternative real estate transaction startup that helps homebuyers make all-cash offers on homes, raised $150 million in a Series C financing round. The company, which also partners with agents to help support their buyers’ transactions with all-cash offers, announced plans to expand to half the U.S. by 2023. Real estate is seeing real estate transactions evolve in real time with startups like Ribbon providing new financing options to homebuyers and agents. Read more about the model in the upcoming 2022 Swanepoel Trends Report.

  • PR Newswire
Compass acquires Texas title insurance company

Compass has acquired LegacyTexas Title, a title insurance company that covers the Dallas-Fort Worth area. The acquisition represents Compass’s continued push to grow its ancillary businesses, which, with the acquisition, now features title and escrow services in six states. The acquisition follows the company’s February 2021 acquisition of KVS Title and its October 2020 acquisition of title and escrow software startup Modus.

  • Fort Worth Business Press