1Q Foreclosure Auction Prices Hit Record High
Auction.com, Irvine, Calif., said average sales price for properties sold at foreclosure auction in the first quarter rose to $147,115, up 8 percent from the previous quarter and up 7 percent from a year ago to the highest level as far back as data is available.
The company’s Q1 2019 Distressed Market Outlook said the average discount of 20.8 below market value rose from a year ago.
The report said scheduled foreclosure auctions decreased 1 percent from a year ago nationwide but rose by 4 percent from the fourth quarter. Auctions increased in 30 states, Including California (up 16 percent), Texas (up 44 percent), Colorado (up 31 percent) and Nevada (up 118 percent). States that saw decreases included New Jersey (down 18 percent), Florida (down 15 percent), Illinois (down 6 percent) and New York (down 6 percent).
“Scheduled foreclosure auctions provide a forward-looking metric for distressed and the increases we’re seeing in many of the western markets signal more distressed sales in that region over the next several months,” said Daren Blomquist, Auction.com Vice President of Market Economics.
The report said completed foreclosure auctions–those that either sold to third-party buyers or reverted back to the foreclosing lender (REO)–fell by 1 percent in the first quarter from the previous quarter and fell by 9 percent from a year ago. Completed foreclosure auctions represented 32.6 percent of all scheduled foreclosure auctions the first quarter, down from 34.4 percent in the fourth quarter and fell by 35.6 percent from a year ago.
“The downward trend in the completed foreclosure auction rate is an indication of increased loss mitigation efforts on the part of mortgage servicers combined with a bigger home equity cushion for many borrowers falling into foreclosure,” Blomquist said.
Auction.com said U.S. properties sold to third-party buyers at the foreclosure auction rose by 4 percent from the previous quarter but fell by 10 percent from a year ago. Third-party buyers purchased 36.9 percent of all properties that completed the foreclosure auction in in the first quarter, up from a two-year low of 35.0 percent in the previous quarter but down from 37.5 percent a year ago. Twenty-five states reported increases in the first quarter.
“Solid real estate investor demand and a limited supply of distressed properties continues to push average prices up in most parts of the country,” said Ali Haralson, Auction.com Chief Business Development Officer. “Even in areas with decreasing prices, the decrease can often be explained with a shift in the type of inventory being sold at auction.”
