Foreclosure Auction Volume Increases Four Percent Annually
by Daren Blomquist
Auction.com, released its Q1 2025 Auction Market Dispatch, which shows that completed foreclosure auctions jumped 20% from the prior quarter and 4% year-over-year to reach a six-quarter high, propelled in part by a January spike to a 21-month high. While volume dipped in February, March closed strong with a 5% annual gain.
Foreclosure auction volume was up across all loan types except for loans insured by the U.S. Department of Agriculture (USDA). Loans insured by the U.S. Department of Veterans Affairs (VA) led the way with a 104% annual increase. The VA foreclosure auction spike came after a nationwide foreclosure moratorium on VA loans expired at the end of 2024.
Scheduled foreclosure auctions rose 14% from the previous quarter to a five-quarter high — a potential harbinger of continued elevated completions into Q2. Despite the gains, total completed auction volume remains at just 49% of its pre-pandemic level.
Demand signals were less decisive. Although activity started strong in January, it softened notably in February and March, keeping the overall Q1 sales rate essentially flat quarter-over-quarter and down from a year earlier. Meanwhile, buyer pricing behavior weakened — a trend more pronounced as the quarter progressed, especially among foreclosure auction participants.
Auction Demand Mixed as Buyers Pulled Back Mid-Quarter
The foreclosure auction sales rates— the share of properties available at auction that sold to third-party buyers — began Q1 on an upswing, reaching an eight-month high in January, up 1% year-over-year. However, February saw demand drop to a 26-month low, with rates falling 7% annually. March showed a partial recovery but remained 7% below prior-year levels.
REO (Real Estate Owned) auction activity was modestly up from the previous quarter, with bidders per asset increasing 2%. But year-over-year comparisons remained negative across all three months, culminating in a 16% annual decline.
Half of 76 major metro areas analyzed posted year-over-year declines in foreclosure auction demand (sales rate), including:
» Chicago (down 16%)
» Houston (down 42%)
» Dallas-Fort Worth (down 19%)
» St. Louis (down 17%)
» Atlanta (down 14%)
On the other end of the spectrum, 37 markets posted annual gains. Notable increases included:
» New York (up 19%)
» Philadelphia (up 10%)
» Detroit (up 3%)
» Washington, D.C. (up 8%)
» Minneapolis-St. Paul (up 4%)
Among top-performing metros in Q1 2025 in terms of foreclosure auction sales rate were:
» Richmond, Virginia
» Milwaukee
» Hartford, Connecticut
» Rockford, Illinois
» Providence, Rhode Island
The weakest markets included:
» Minneapolis-St. Paul
» Little Rock, Arkansas
» Beaumont, Texas
» Corpus Christi, Texas
» Mobile, Alabama
Buyer Caution Evident as Price Demand Slips Across Most Markets
Price demand — the amount buyers at auction are willing to pay relative to estimated after-repair value — flattened in Q1 2025 and trailed prior-year benchmarks. Foreclosure auction price demand held steady sequentially at 56.7%, up slightly from 55.9% in Q4 2024 but down from 59.0% a year earlier.
Monthly performance told a clearer story of decline in foreclosure auction price demand. The metric fell 2% year-over-year in January, 4% in February, and 6% in March.
REO price demand followed a similar arc — rising 3% quarterly and 1% annually to 57.9% — but with monthly softening. After starting strong with an 8% YoY jump in January, gains flattened in February and turned to a 4% decline in March.
Of the 76 markets analyzed, 59% saw annual declines in foreclosure auction price demand in Q1 2025. Those included:
» Chicago (down 4%)
» New York (down 1%)
» Houston (down 14%)
» Philadelphia (down 7%)
» Dallas (down 8%).
Some bright spots emerged: 41% of markets posted year-over-year increases in foreclosure auction price demand, led by:
» Minneapolis-St. Paul (up 57%)
» New Orleans (up 7%)
» Baton Rouge (up 5%)
» Baltimore (up 2%)
» Pittsburgh (up 2%)
Foreclosure Volume Recovers from Lows
Foreclosure auction completions surged 20% quarter-over-quarter to their highest level since Q3 2023. The total volume recovered to 49% of pre-pandemic (Q1 2020) levels, up from 41% in Q4 2024. States seeing the most pronounced annual increases were:
» Arizona (up 151%)
» Utah (up 100%)
» New Hampshire (up 80%)
» Kansas (up 74%)
» Texas (up 73%)
Trends among top-volume states were uneven, with Texas, Illinois and Michigan posting an annual increase, and New York and Ohio posting an annual decrease.
Among states with above-100% foreclosure auction volume recovery relative to pre-pandemic norms were:
» Connecticut
» Colorado
» Wyoming
» Alaska
» Louisiana
» South Dakota
» Minnesota
» Kentucky
» Utah
Scheduled foreclosure auctions — a leading indicator of future volume — climbed 14% quarterly to 60% of pre-pandemic levels, the highest since Q4 2023.
REO supply also rose — up 2% quarterly and 3% annually — reaching a six-quarter high, though still just 39% of pre-pandemic levels.
Bid-Ask Spread Signals Buyer-Seller Gap Persists
The gap between what buyers are willing to pay and what sellers are willing to accept — known as the bid-ask spread — showed diverging patterns between auction types in Q1 2025.
Foreclosure Auctions
The spread held steady at 7 percentage points in Q1 2025, the same as Q4 2024 but more than double the 3-point spread a year earlier. The spread widened month-by-month, from 6 points in January to 7 in February and March, driven in part by an uptick in seller pricing (up 100 basis points compared to the previous quarter).
REO Auctions
The spread narrowed to 10 percentage points in Q1 2025 from 12 points in the previous quarter, thanks to stronger buyer pricing and only minimal upward movement in seller expectations (up 10 bps compared to the previous quarter). The spread remained flat compared to a year ago.
