2021 was a monumental year in the real estate industry. We experienced the lowest housing supply since 1982. Interest rates stayed under or close to 3%. Housing prices skyrocketed. And more buyers entered the market.
With an increasing crop of consumers buying, selling, and moving, it became clear that the outdated real estate process needed to change. And 2021 shed light on how technology will transform the entire consumer real estate experience. But this year was just the beginning.
Before looking at the road ahead, let’s reflect on key product developments that got us to where we are today, driving growth and innovation for our business.
Bringing speed to innovation
This year was a year unlike any other for our team. We more than doubled our footprint to 44 U.S. markets, reached our 100,000th customer transaction, onboarded more than 1,000 teammates from across the country, acquired two technology teams, enhanced our mortgage capabilities, deepened our product integration with Realtor.com, and launched three core new products and experiences: Opendoor Backed Offers, Self-Guided Home Walkthroughs, and Opendoor Complete.
When the new year began, it was clear that the demand for housing was only increasing—and buying a home was tough. According to our latest national survey of first-time homebuyers, more than half of buyers (56%) made five or more offers before purchasing their current home, averaging 10 offers apiece. Ninety-eight percent of first-time homebuyers lost a home they were interested in. And, cash was dominating: 25% of offers were all-cash, up from 15% a year ago.
To help buyers compete, we introduced Opendoor Backed Offers in March 2021. Our goal was to democratize cash offers—by taking something previously only available to the wealthy and providing qualifying buyers with the benefits of an all-cash offer when they bid on their next home.
In September 2021, we made the inspection process easier and more convenient for our customers. Our team evolved what used to be a simple app meant for on-field usage into a full-fledged, extensible platform that has enabled us to experiment, iterate, and simultaneously deploy variants of home assessment methods seamlessly. We introduced self-guided home walkthroughs to our seller flow, reducing a two-hour inspection to a process that can be done in a fraction of the time, while also improving accuracy and consistency.
And just last month, we introduced a product experience that brings us one step closer to our vision since day one: making buying and selling a home as simple as tapping a button. Opendoor Complete combines the power of our technology, operational efficiency, and unparalleled customer service to help people buy, sell and move all at once, in one simple digital experience.
The passion for this project was clear from the start, and it was remarkable to witness the collaboration across teams that brought our vision to life. But it was no easy feat. Our product team painted a multiproduct vision, our design team developed a completely new design system, and our engineering team merged two distinct capabilities from our buyer and seller products. This ability to buy and sell seamlessly has never existed in real estate, and teams across the company worked tirelessly to launch Opendoor Complete in three months. We know that 65% of Opendoor sellers are also buyers, so it’s our hope to help unlock equity held in the housing market and generate geographic mobility for millions of homeowners.
Enabling rapid scaling with our technology platform
The reason we could introduce and grow our products so rapidly? Opendoor’s technology platform.
One major component of our platform is our pricing and data capabilities, which enabled expansion both in markets and in the types of homes we buy. Over the past seven years, we’ve built a system that combines the best of human local expertise and sophisticated machine expertise. A system that allows us to accurately forecast home price appreciation, even in a hot market like today. As a result, we increased the total value of qualifying homes we purchase by more than 50%, buying older homes, homes in age-restricted communities, higher-priced homes, and ultimately, serving more sellers across the country.
We also experienced a major surge in customer demand, not unlike the rest of the real estate market. In 2020, key life events were postponed, including weddings, having kids, and even career changes. And since the Great Financial Crisis of 2008, there’s been a steady increase in demand for homeownership. Remote work became commonplace after the pandemic causing many people to re-evaluate how and where they can and want to live. The demand adjusted upwards fast, but the supply was slow to catch up.
The reason we could meet this increased demand is due to our transaction and operations platform capabilities—tools and systems that enable us to effectively communicate with our customers, and manage renovations, trade partnerships, and overall inventory at scale. This platform allows us to maximize the efficiency of our incredible operations team in order to deliver a great customer experience.
Entering the second act of real estate digitization
While 2021 was filled with innovation, we’re still in the early stages of true digitization in the real estate industry. When transforming an industry, there are many chapters and 2022 is our next inning.
Here are three ways I predict technology will impact the housing market next year and what movers can expect:
- All-in-one real estate transactions will become the new norm: Selling your current home, buying your next home, and handling your financing will be a single activity rather than distinct separate transactions. Historically speaking, buying and selling a home requires eight, or more, different competing counterparties, dozens of interdependent steps, and daily uncertainty. 2022 will bring a new era of simplicity.
- Sellers will have more transparency into their largest asset: For decades, homeowners have been unable to know the current value of their home, leaving them feeling locked in their existing home, uncertain about their next move. Because of machine learning and advanced pricing capabilities, sellers will be able to unlock liquidity in their homes much easier.
- Buyers will have more control over their home shopping and homeownership experience: Much of the existing home buying experience doesn’t align with the realities of life, whether you’re a single mom, retiree, or full-time employee. However, in 2022, we’ll see this start to change. With advancements in 3D-capture and computer vision, touring homes digitally is more accessible. And we’ll see steps in the process meet the buyer where they are, not the other way around. I predict more Americans will be able to achieve homeownership next year through more democratized and transparent solutions available in real estate.
But again, it’s just the beginning. We’re in a decade-long shift towards the complete digitization of the housing transaction. And Opendoor is at the forefront. As more movers choose to transact fully digitally with a trusted brand, we are working hard to build the future one-stop shop for all things real estate. Heading into 2022, our focus remains the same. We’ll continue to leverage our technology platform to deliver new products and services at an even higher pace, serve a broader set of customers across the country, and do it all in an extremely efficient way.
The best is yet to come.
Ian Wong is the Chief Technology Officer and co-founder at Opendoor.