Buyer demand for inventory in both foreclosures and REO auctions also declined in the fourth quarter. But consumers expressed more optimism after the conclusion of the 2024 elections. According to Auction.com, 43% of buyers surveyed said the election results made them want to buy properties at auction. Only 3% say the election has reduced their willingness to buy, while the remaining 54% have not changed their intentions.
Q4 2024 results follow the trend of declining auction demand in the previous quarter.
One respondent wrote that “the election results should create a better market going forward.” Someone who showed more willingness to buy after the election said that “the price of everything has gone up, including foreclosures.” However, as long as the profit margins remain the same it doesn’t concern me too much.
Despite that, the level of sales at auctions decreased by 3% between the third and fourth quarters as it remained 2% higher than last year. But from November to December, the rate rose 7% to a five-month high while sitting 5% above December 2023.
Auction.com reported that demand for REO auctions followed a similar pattern. REO auction buyers also spent more, with the share of quality bids (within 30% of the seller’s reserve price) up 2% in December.
In both types of auctions, the asking price – the amount paid by buyers compared to the estimated repair price after repair – increased in November and December. Buyers attributed the increase to a shortage of foreclosures.
“The lack of items to be bought at auction makes us more likely to buy properties with strict restrictions.” one respondent wrote.
At the local level, 54% of the markets analyzed in the report posted an annual decline in the fourth quarter in the bid ratio and the number of foreclosed auction properties. These markets include Chicago, Dallas, Detroit, Philadelphia and Houston. In contrast, markets that saw bid-to-value ratio increases include New York City; Cleveland; in Baltimore; Washington, DC; and Phoenix.
Five cities stood out for their increased sales rates at foreclosure auctions. Cleveland had the highest growth, up 29% year over year. It was followed by Philadelphia (+19%), Houston (+14%), New York (+12%) and Chicago (+9%). Sales prices are down every year in Dallas, Detroit, Atlanta, Minneapolis and San Antonio.
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