Scheduled foreclosure auction volume provides a good forward-looking indicator of future foreclosure volume in the next six months. That’s because many properties don’t go to auction the first month in which they are scheduled for auction. On average, properties brought to auction on the Auction.com platform in 2023 were scheduled for auction 1.9 times. The average number of days between the first scheduled auction date and the eventual final auction date was 165 days—about five and a half months.
buying opportunity for many buyers, including local real estate investors and even owner-occupant buyers. “Buy one of those properties that are in really bad condition … fix it … and sell it at a cheap price,” said Karina Barone, a real estate agent and investor based in Birmingham, Alabama, describing her approach to purchasing distressed properties. “The idea of investing was to make a little money but also give back to the community by providing people with affordable housing they can purchase with financing. Most distressed properties sold at auction do not qualify for a loan because of their condition, and the people buying my renovated properties don’t have enough money to buy in cash at the auction.”
Barone recently listed for sale a renovated home that she purchased on Auction.com, but she has also helped several clients purchase distressed properties to live in. “Before I decided to invest, a client of mine saw a house for sale … so I started searching; the house was on Auction.com. I didn’t know anything about auctions back then,” said Barone, recounting the first time she helped a client purchase a distressed property at auction. “It’s more about what you’re doing for others than about the money.” Distressed property buyers like Barone and her clients purchased properties at bank-owned (REO) auction for 57% of estimated after-repair market value (or 43% below after-repair value) on average in the third quarter of 2023,
DISTRESSED PROPERTY PRICING
Despite the relatively low volume in 2023, foreclosure auctions still represent a good
thinkrealty.com | 9
Made with FlippingBook Online newsletter