A University of Washington study revealed iBuyers give Black homeowners better offers than they receive on the open market. However, those offers potentially come with some longterm tradeoffs.
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Black homeowners have long struggled to experience the same gains as their white counterparts during the selling process. They grapple with slower home value growth, especially if they live in a majority-minority ZIP code. And when it’s time to sell, they disproportionately receive low-ball appraisals and buyer offers — two more roadblocks in Black Americans’ quest to build long-term wealth.
However, according to a University of Washington research team, Black homeowners have been able to experience better seller outcomes in the iBuyer sphere than in the open market.
What gives?
The Information School team zeroed in on Mecklenburg County, North Carolina, which has 1.1 million residents across six cities: Charlotte, Huntersville, Matthews, Cornelius, Pineville, and Mint Hill. Charlotte accounts for almost 900,000 of Mecklenburg’s 1.1 million residents and has a Black population of 35 percent. IBuyers achieved solid results in Charlotte, reaching 8 percent market share in 2021.
The team accessed 50,000 publicly available property transfer records from 2018 to 2023 for Mecklenburg County and then cross-referenced those records with North Carolina voter rolls, which provide racial data. From there, the team controlled for 50 factors, including home size and neighborhood crime rate, and found the offer gap between Black and white homeowners shrunk from $36,051 on the open market to $4,436 with iBuyers.
The gap shrunk due to the fact that iBuyers paid Black homeowners $4,376 more and white homeowners $27,239 less, on average.
“There’s very little reason for us to…