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Auction.com: Demand for Auction Properties Continues to Fall in Q3

Industry Update
October 28, 2024

Source: Mortgage Bankers Association

Auction.com released its Auction Market Dispatch for the third quarter, finding that demand continues to weaken.

All the key auction demand metrics fell at the national level in Q3 from Q2–both for foreclosure auctions and for bank-owned (REO) auctions.

For one, the average number of bidders per property sold at REO auction was down 10% from Q2 and down 8% year-over-year. The metric ended at a 23-month low in September.

However, demand at REO auction is still above pre-pandemic levels, with the average number of bidders still 24% above the 2019 average.

For foreclosure auctions, the sales rate was down 3% from Q2 and down 2% year-over-year, with a nine-month low hit in September. But, it’s still 39% above the 2019 figures.

Many markets are bucking the trend however, with demand increasing somewhat in the Midwest and Northeast and decreasing in the Southeast and West.

Price demand fell in Q3 as well.

Winning bidders at REO auctions in the quarter were willing to pay 54.4% of estimated after-repair value, down nearly five percentage points from a two-year high of 59.3% in Q2, and down from Q3 2023’s 57.3%.

The winning bid-to-value ratio at REO auction was five points below the 2019 average of 59.7%.

For foreclosure auctions, winning bidders were willing to pay 56.6% of after-repair value on average, down from a two-year high of 59.7% in the previous quarter and down from 58.7% in Q3 2023.

The Q3 price-to-value ratio at foreclosure auction was below the 2019 average of 60.3%.

Constrained supply is also affecting the market. The number of properties brought to foreclosure auction was at 44% of the pre-pandemic level of Q1 2020. The number was also down 46% from Q2, and down 53% from Q3 2023.

REO properties brought to auction was at 37% of the pre-pandemic level, up slightly from the two-year low of 36% notched in Q2, and down 40% year-over-year.

The bid-ask spread widened in Q3 2024, for foreclosure auctions and REO auctions.

The REO auction bid-ask spread hit 14 percentage points in the quarter, up from 10 points in Q2 and 12 points in Q3 2023. That’s the biggest spread for the metric since Q4 2022.

The foreclosure auction bid-ask spread grew to 6 percentage points, up from 4 points in Q2 and 3 points in Q3 2023.

For full report, please click the source link above.

CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

Business Development

Carrie Tackett

Business Development Safeguard Properties