Inaugural Neighborhood Stabilization Report Shows Community Impact of Distressed PROPERTY Dispositions

  1. Analysis of 325,000 distressed dispositions in last five years shows impact on homeownership rates, property values, home affordability and distressed homeowners
  2. Profile of the local community developers who are the primary buyers of distressed properties at auction provides insights into why they often produce positive community outcomes
  3. A spotlight on a Birmingham, Alabama, neighborhood illustrates community impact using data and stories from local community developers operating in the neighborhood

Auction.com, the nation’s leading distressed real estate marketplace, released its 2023 Neighborhood Stabilization Report, a first-ever report that shows distressed properties sold on a transparent auction platform produce higher homeownership rates, more value added during renovation and shorter renovation timelines than distressed properties sold in the traditional retail market.

To view the full report, visit:

https://www.auction.com/lp/in-the-news/2023-neighborhood-stabilization-report/

Those findings are based on an analysis of nearly 325,000 distressed property dispositions nationwide over the last five years using public record data and underserved area data from the Federal Housing Finance Agency (FHFA). That analysis also shows that renovated properties resold or rented by auction buyers are still affordable for local families, including in low-income and minority neighborhoods.

The report uses Auction.com buyer data to provide a data-based profile of buyers at distressed property auctions, 77 percent of which are local community developers who purchase fewer than 10 properties a year and live within 25 miles of most distressed properties they purchase. Another 15 percent are owner-occupant buyers.

A transparent foreclosure auction marketplace also helps to uncover and protect home equity for distressed homeowners, equity that is lost if a property reverts to the foreclosing lender as real estate owned (REO). The report looks at the share of foreclosure auction sales with potential equity for distressed homeowners and the average amount of that potential equity.

Finally, the report spotlights a Birmingham, Alabama, zip code where many distressed property sales are in low-income and minority Census tracts. Using public record data, Auction.com sales data and FHFA underserved area data, along with interviews with local community developer buyers purchasing in that zip code, the report shows how responsible disposition can positively impact communities.

Highlights from the report:

  1. 77 percent of renovated homes resold after being purchased at auction go to owner-occupant buyers, 11 points higher than the 66 percent of traditional bank-owned (REO) sales that go to owner-occupants
  2. 37 points in property value are added over 187 days on average during the renovation of distressed properties purchased at auction
  3. 23 percent of the median family income in the surrounding neighborhood is needed on average to purchase a renovated foreclosure originally purchased at auction
  4. 24 percent of distressed property auctions generate potential surplus funds for the distressed homeowner, protecting any equity in the property for that homeowner
  5. 67 percent of properties sold at foreclosure in 2023 in the underserved neighborhoods of zip code 35215 in Birmingham, Alabama, are owner-occupied, compared to only 24 percent of those sold at foreclosure auction in 2018
  6. 18 percent of the median family income in zip code 35215 is needed to purchase renovated foreclosures there on average in 2022

About Auction.com

Auction.com is the nation’s leading online marketplace for the disposition of distressed residential properties. The company goes beyond traditional disposition programs, offering tools and services that stabilize neighborhoods, expand homeownership, maximize sales, shorten the sales cycle, yield higher returns, mitigate risks and elevate results. Our seller strategy includes customized and flexible programs, data intelligence and buyer insights, and pioneering technology. This includes Remote Bid®, which expands the buyer base nationwide by letting buyers bid on and win select foreclosure sales from anywhere, and Portfolio Interact™, featuring Bid Interact™. The national footprint for online and in-person auctions includes all 50 states, as well as Washington, DC, and Puerto Rico. Auction.com is headquartered in Irvine, CA, with offices in key markets nationwide.

Contact

Daren Blomquist
Auction.com

Tel.949.355.3371

Email: dblomquist@auction.com

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