Auction.com: Foreclosure Auction Volume Up in Q3 as Demand Falls

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Auction.com, Irvine, Calif., released its Q3 Auction Market Dispatch, finding that foreclosure auction volume increased 4% quarter-over-quarter and 31% year-over-year, to hit a 10-quarter high.

Scheduled foreclosure auctions were down 2% from Q2 but up 21% year-over-year. Foreclosure auction volume was up across all loan types, with VA-insured loans up 504%, privately held loans up 28% and FHA-insured loans up 22%.

Thirty-six percent of buyers surveyed said market conditions are making them less willing to buy distressed properties at auction. That’s down 38% from Q2, but up 34% from a year ago. And, 19% say the conditions are making them more willing to buy.

The foreclosure auction sales rate fell 2% quarter-over-quarter and 12% year-over-year to end the period at an 11-quarter low. September specifically saw a 65-month low in the sales rate.

REO auction demand also fell somewhat–bidders per asset were down 2% quarter-over-quarter and 14% year-over-year to a 23-quarter low.

Foreclosure auction buyers were willing to pay an average of 55.7% of estimated after-repair value in Q3, down from 56.5% in Q2 and 56.6% a year ago. REO auction buyers paid an average of 53.6% of after-repair value, down from 55.6% in Q2 and 54.4% in Q3 2024.

Sellers lowered pricing at foreclosure and REO auctions in Q3. The average credit bid-to-ask-after-repair value at foreclosure auction fell 105 basis points from Q2 and 88 basis points from a year ago. But, the bid-ask spread stayed flat at 6 percentage points.

At REO auction, seller pricing dropped 108 basis points quarter-over-quarter and 225 basis points year-over-year, narrowing the bid-ask spread to 12 percentage points, compared with 14 points a year ago.