they expect to increase their maximum bid pricing in 2024, while 57% of institutional investors said they expect to decrease their maximum bid pricing in 2024. “Remote bidders have been driving some numbers that seem very high to me,
given the condition of the property,” said Tony Tritt, a longtime real estate investor who buys at foreclosure auction in the markets west of Atlanta, Georgia. Remote bidders are bidders who use the Auction. com mobile app to bid remotely during a
foreclosure auction. “Additionally, with the lower volumes, it seems reasonable that people are paying up to just get something.” The price that distressed property buyers on Auction.com are willing to pay relative to a property’s “after-repair” value—the estimated value of the home once it has been fully renovated—is a reliable forward-looking indicator of retail home prices. This indicator accurately predicted the drop in retail home price appreciation in mid-2023 and the rebound in retail home price appreciation in late 2023, in both cases about six months in advance. In the second half of 2023, that price-to- value auction indicator turned downward, indicating another slowdown in retail home price appreciation in early 2024. The indicator has plateaued in recent months, though, signaling that investors are expecting the retail market to stabilize by the second half of 2024. •
HOW DO YOU EXPECT YOUR MAXIMUM BID AT AUCTIONS TO CHANGE IN 2024, RELATIVE TO ESTIMATED PROPERTY VALUE? Increase Decrease Stay the same
19%
22%
30%
21%
57%
21%
22%
21%
61%
56%
48%
21%
Individual Investors (Local Community Developers)
Institutional Investors
Other Investors
All Investors
Source:Auction.com January 2024 Buyer Survey
DAREN BLOMQUIST
AUCTION BIDDING BEHAVIOR & RETAIL HOME PRICE APPRECIATION
Winning Bid/After-Repair Value
Retail Home Price Appreciation (NAR)
75.0%
30.0%
25.0%
70.0%
20.0%
Daren Blomquist is vice president of market economics at Auction.com. In this role, Blomquist analyzes and forecasts complex macro and microeconomic data trends within the marketplace and industry to provide value to both buyers and sellers using the Auction.com platform.
65.0%
15.0%
10.0%
60.0%
5.0%
55.0%
0.0%
50.0%
-5.0%
Sources: Auction.com, NAR
thinkrealty.com | 31
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