Auction.com: More than Half of Foreclosure Buyers ‘Mom and Pop’ Investors
As the foreclosure crisis from earlier this decade wanes, the profile of purchasers of foreclosed properties has shifted away from larger investment operations to “mom and pop” investors, said Auction.com, Irvine, Calif.
The company’s 2019 Buyer Insights Survey Report reported 51 percent of foreclosure auction buyers plan to purchase fewer than five properties in 2019, while 22 percent of buyers plan to purchase more than 10 properties for the year. Only 2 percent of buyers said they plan to purchase more than 100 properties in 2019.
“Foreclosure auctions are no longer dominated by larger investors able to navigate what was an opaque process of purchasing a property at the courthouse steps or from a hard-to-find REO asset manager,” said Auction.com CEO Jason Allnutt. ”The majority of foreclosure and REO auction buyers are now smaller, mom-and-pop investors who are taking advantage of a much more accessible buying experience.”
Key survey findings:
–51 percent of buyers surveyed plan to purchase fewer than five properties in 2019.
–73 percent are purchasing properties in the South region of the country, the highest share of any region.
–24 percent said their local housing market is overvalued with a correction possible.
–33 percent expect to see home price appreciation between 3 and 5 percent over the next 12 months.
–Novice investors were identified as the biggest competitive threat to buyers surveyed.
–Rehab-and-flip was the most popular investing strategy.
–49 percent budget at least 20 percent of the property purchase price for rehab costs.
The report is based on a survey sent to more than 4,700 buyers who had purchased at least three properties on the Auction.com platform. The survey was conducted between June 6 and June 20, with 197 buyers responding.