HomeVestors Bought 10,000 Houses in 2020, Generating $1.4 Billion
HomeVestors®’ 1,150 independently owned and operated We Buy Ugly Houses® franchises purchased almost 10,000 houses in 2020, generating sales of more than $1.6 billion. While the total number of houses was about 14 percent less than anticipated due to the pandemic, overall, franchises’ average sale price for houses was over ten percent more than the previous year’s average sale price.
“We never stopped buying houses, and nobody knew what the impact on real estate would be in March. But, a funny thing happened—March and April were some of our best-selling months,” said David Hicks, CEO of HomeVestors. “Franchises were quickly listing properties to avoid them not selling in the case of a crash, and those houses sold for top dollar. Across the network they discovered that there was no fear of selling because the people buying in our part of the market are always looking. And, as soon as a market trend or behavior becomes even the slightest bit predictable like it did in spring, our franchises react quickly and confidently.”
Average sale price for the houses HomeVestors sold was higher in 2020 due to high demand and a short supply of houses in the company’s market niche. Demand for the houses HomeVestors buys is consistent because there are always young families looking to get a house with a backyard for their children or pets. When 2020 combined that evergreen trend with the sudden number of people that saw the value of a backyard skyrocket during lockdown, an already high demand grew significantly.
Buying based on current market conditions, franchises thrived in spite of the pandemic by sharing knowledge across the network, like the news that houses were selling easily. For example, as some of the first markets to face lockdowns in spring, like Boston, adjusted to keep buying houses, those franchises shared their learning across the company. By the time other areas entered lockdown, local franchises were ready with safety measures in place. Ensuring homeowners still had buyers, franchises served as a veritable canary in the coal mine, helping push other buyers back to the market. The network’s ability to organically learn and adjust has helped We Buy Ugly Houses weather good markets, bad markets, and even scary markets like 2020.
“We may be a national company but are actually made up of a network of 1,150 local small businesses that enjoy the support and backing of a powerful national brand,” added Hicks. “The first indication we have of franchise confidence is their level of ad spending, and for first quarter 2021, our franchises are advertising at a level 6 to 10 percent higher than they did last year pre-COVID. We anticipate demand in the selling and renting market to stay strong through this year along with a continuation of higher sales prices. Prices will likely slow their increase as the vaccine becomes more prevalent and houses that people may not be listing due to fears of showing during the pandemic finally come on the market.”
In many markets, franchises saw increased activity from homeowners that had built significant equity and were taking advantage of historically low mortgage rates to move-up. Facing a difficult limbo in having to coordinate both buying and selling at the same time in the midst of a housing shortage, sellers simplified the process by working with We Buy Ugly Houses®. Avoiding the hassle of having to schedule and wait on inspections, repairs, negotiations, and all of the uncertainties of coordinating financing, sellers instead opted for a firm cash offer and sure timeline from a HomeVestors franchise.
HomeVestors has been America’s number one homebuyer for several years. More than 80 percent of houses franchises purchase are less than 1,400-square feet and were built before 1980. Franchises then generally rehab and sell the homes or hold them as investment properties. In creating a valuable supply of housing for first-time buyers, We Buy Ugly Houses® local small business owners also help raise real estate values and drive revitalization, bringing the progress of new development and an affordable housing supply to their local communities.