Overnight News: If the iBuyer idea is any good, what’s the rush to go public?

As a matter of news, OfferPad went public last week – meaning none of the iBuyers are now backed by wide-awake entrepreneurs, just pie-eyed punters. The “offering” was done by Wall Street chicanery to avoid even the casual due diligence white-shoe investors normally do.

But, of course, no due diligence will be possible for any iBuyer until the market has turned. Despite all the hoopla, the scam lives or dies on the rate of exsanguination caused by (stupidly) owning real estate.

When iBuyers buy at 95% of fair-market value and sell at 105%, they cheer themselves as real estate geniuses – when, just for right now, at the end of a nationwide feeding frenzy, everything is selling at 105%.

What story will they tell when they buy at 95% and sell at 85%?

What will shareholders say when they discover they were told only half the truth? – the only half that can be known in a market run-up that began before the iBuyers existed, but which will end resoundingly, hopefully not enduringly so.

Zillow and Redfin were already publicly-traded. OpenDoor and OfferPad have both just gone public in a mad rush – but why? If the idea is good enough to thrive in a down market, proving that fact would make the company worth much more, would it not?

I think the plain vanilla iBuyer idea is eclipsed by the move-up iBuyers – hence OpenDoor and OfferPad are both targeted poorly. But none of these notions have answered a real estate market when no one is calling, and, until they do, marketing them to arms-length investors strikes me as being predatory – like Dan Drew shedding himself of his watered (live)stock.

In other news:

CNBC: 48% of renters worry they won’t ever be able to buy a home, survey finds.

City Journal: No More Government Unions? A proposed California ballot initiative would outlaw public-sector labor groups.

Jason Rantz: Mass Resistance Arises As Washington Makes It Nearly Impossible To Get Vaccine Exemptions.