Among the top 10 markets, average purchase discounts decreased in the first half of 2022 in Cleveland, Ohio; Houston, Texas; Miami, Florida; Washington, D.C.; and Philadelphia, Pennsylvania. Among the larger set of 123 markets, those with the biggest decreases in average purchase discounts were Fayetteville, Arkansas; Macon, Georgia; Scranton, Pennsylvania; Greenville, South Carolina; and Hartford, Connecticut. Deeper discounts at distressed property auctions could come if demand continues to deteriorate in the retail market, putting downward pressure on prices. Although he’s not expecting that scenario to play out in most markets, Lizell is putting aside some dry powder to ramp up acquisitions if it does. “It’s more shifting to get cash quicker … so if it does shift, we are more in the position to take advantage of falling prices,” he said, recalling how quickly the market shifted in 2008. “We make more money in a down market than we do in a market like this.”
Richmond, Virginia-area investor Rick Starnes is already in “aggressive acquisition mode” and said he would become even more aggressive if prices fall in his market. “If that happens again, I’ve got some money set aside. I’ll go out and buy four or five of them,” said Starnes, who has been purchasing properties at foreclosure and REO auction since 2018, while continuing to hold down a full-time job. “If you’re holding the asset as a cash investor, the market is going to turn around. It might take years to turn around, but in the meantime, you can rent it out. “The best thing I can see to hedge against inflation is to buy real estate,” he added. •
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.
26 | think realty magazine :: september - october 2022
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