The majority of foreclosure sales to third-party buyers are owner occupied within a year, according to a new study from Auction.com. Auction.com’s Seller Strategy Report notes that 56% sold of properties sold to third parties at foreclosure sale in Q2 2018 were Owner-Occupied a year later, compared to 43% that reverted to the lender.
Additionally, third-party foreclosure sales executed higher relative to credit bid at the foreclosure sale than did properties sold as REO, and properties sold via “Day 1” REO online auction sold on average 95 days faster than REOs sold via the MLS..
“By synthesizing the rich transactional data from our market-leading platform with public record and MLS data, we’re able to provide a holistic view of the disposition metrics that matter to distressed property sellers,” said Jason Allnutt, CEO at Auction.com. “At the top of that list are execution of the sale price relative to credit bid, time to sell a property, and impact on the surrounding neighborhood.”
Opportunity Zones execute higher to reserve than non-opportunity zones, with properties in Opportunity Zones that sold to third-party buyers at foreclosure auction executed 5 percentage points higher relative to reserve than properties located outside of Opportunity Zones. Homes in Opportunity Zones are cheaper, in general, as well. ATTOM Data Solutions reports that 80% of these zones had median home prices in the Q2 2019 that were below the national figure of $266,000, and that half had median prices of less than $150,000.
Additionally, compared to the surrounding regions, median Q2 2019 prices in about one in four zones were less than 50% of the typical value in the Metropolitan Statistical Areas where they exist. Within Opportunity Zones, 86% had median Q2 2019 sales prices that were less than the median sales price for the surrounding Metropolitan Statistical Area (MSA). Roughly 26% had median sales prices less than half the figure for the MSA. Only 14% had median sales prices that were equal to or above the median sales price in the MSA.