IRVINE, CA—A high percentage of off-market for-sale-by-owner transactions means the traditional gatekeepers of real estate listings in the market lose some of their credibility as gatekeepers, ATTOM Data Solutions SVP Daren Blomquist tells GlobeSt.com. A recent report from the firm states that only 8% of home sales in 2016 were off-market FSBOs, according to new data from the National Association of Realtors, but the picture is markedly different in some local markets such as Phoenix (25% off-market sales in 2016) and Dallas (14% off-market sales in 2016) where the so-called iBuyers and other MLS disrupters are concentrating their efforts. We spoke with Blomquist about why these disruptors are focusing on these particular markets and the impact a high percentage of off-market FSBOs has on these markets and the surrounding areas.

GlobeSt.com: Why are so-called iBuyers and other MLS disruptors concentrating their efforts in certain local markets such as Phoenix and Dallas, where off-market FSBOs were strong in 2016?

Blomquist: Markets like Phoenix and Dallas are good testing grounds for iBuyers for a few reasons. First, they are fast-appreciating markets where the iBuyer model of basically flipping a property and allowing appreciation to provide a profit works well. Second, they are still reasonably priced markets closely in line with the national median home prices, providing the iBuyers less risk on each transaction as compared to a high-priced market such as many of those in coastal California, New York or even Seattle and Denver. Third, these markets have proven to be good markets for old-school direct buyers such as HomeVestors and NetWorth Realty, both of which have a similar model to the iBuyer, with the major difference being in how they market to prospective sellers.