- 19 hours ago
If you think institutional investors dominate foreclosure auctions, the number may surprise you. In this interview, Allison LaForgia sits down with Daren Blomquist, who shares fresh data and analysis on who’s really buying foreclosed homes and how those buyers influence neighborhood revitalization and housing access.
Blomquist explores emerging trends in auction activity, what they reveal about market health and how policy changes could affect owner-occupant properties. From misunderstood market narratives to signals industry leaders should be watching closely, this discussion delivers data-driven insight into where housing supply could come from next.
Blomquist explores emerging trends in auction activity, what they reveal about market health and how policy changes could affect owner-occupant properties. From misunderstood market narratives to signals industry leaders should be watching closely, this discussion delivers data-driven insight into where housing supply could come from next.
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00:06From Dallas, Texas, I'm Allison LaForgia, Managing Editor of HousingWire's Content
00:11Studio. And today I'm sitting down with Darren Blomquist, VP of Market Economics at Auction.com.
00:17Darren, thank you for joining me. Good to be here. Thanks for having me.
00:20So let's set the stage with what you're seeing in foreclosure auction data right now that most
00:28surprised you and maybe even a little bit of what the industry should be paying attention to.
00:34Yeah, I think that's a good question because I think there is actually some news here. The last
00:39couple of years, really the last five years, foreclosure volume has been pretty low and in
00:46the pandemic it was almost nothing. We saw a little uptick in 2022 but then it's kind of been flat
00:51since then. And in fact, I would say in 24 and early 25, we were seeing an unexpectedly low level
00:59foreclosure volume. But what we saw at the end of 25 and into this year now are some pretty
01:05substantial percentage wise increases in foreclosure auction volume. And they are also
01:10the bank owned auction volume that we do. It's not, we're still, I always have to say this for
01:15for people like Logan and others that we were so well below the pre-pandemic level. So we're at about
01:2340% below pre-pandemic levels. But in the fourth quarter of 2025, we saw a 48% year-over
01:29-year increase
01:29in foreclosure auction volume. So volume is coming up. It's still not crisis levels, but I think what
01:37mortgage servicers may be missing there is that there's been a shift in the market and we're,
01:42it's not a crisis, but it's something that they need to adjust to. And they could see their loss
01:47severity rates go up on these defaulted loans if they're not paying attention to this trend
01:54and really pricing their properties a little bit different at auction. It kind of, it parallels the
01:58retail market a little bit where it's become more of a buyer's market at foreclosure auction and less
02:04of a seller's market. So those sellers who are the servicers need to recognize that and adjust
02:09pricing and adjust their strategies to make sure that they're continuing to mitigate their loss
02:15severity. Now, I want to talk a little bit about who's buying at foreclosure auctions because I think
02:22there are some misconceptions around what that actually looks like. And I want to talk about why
02:27that matters. Yeah, I'll start with why that matters. I think it matters because if I think there's
02:33a perception out there, and I'll get into the missing receptions exactly, that the folks buying
02:38at foreclosure auction are part of the problem when it comes to housing supply and housing affordability.
02:45And so if it's, if that's viewed as a problem, and I would argue that they're actually part of the
02:50solution instead of the problem. And so if policymakers and others come at it, well, these people are a
02:56problem. We need to do something to correct this problem. I actually would argue that that's going
03:01to backfire and contribute to worse housing affordability and, and worse housing supply.
03:08So the misconceptions are, first of all, only investors are buying at auction. We actually see
03:13about, according to our surveys, as well as our own data, about 15 to 20% of our buyers are
03:20owner
03:20occupants. And which doesn't sound like a lot, but when you're talking about an all cash auction,
03:25no interior inspection, distress, pretty highly distressed properties, it's actually somewhat
03:31surprising to me to see that 20% of our buyers are owner occupants. So that's number one. Some
03:37of these properties are actually going directly to owner occupants. Number two misconception is that
03:43the buyers are these large institutional investors, whatever that means exactly.
03:47The problems that we hear about in the news.
03:50And I would, I would definitely argue our data shows it's not the case. Maybe 10 years ago,
03:5415 years ago, there were some of these big Wall Street firms buying up properties at auction.
04:00That's not the case anymore. I was just looking at our data. 99% of our buyers bought fewer than
04:0610
04:07properties in 2025. So, and 80% bought one fewer than two or two or fewer properties, one or two
04:15properties.
04:15So these are not big institutional investors. The median distance between the properties they buy and where
04:21they live is 17 miles. And, um, you know, so they're, they, we call them local community developers.
04:28They live where they're buying in talking to them. They really care about the communities that they're
04:33buying and the success of those communities. And they're buying in relatively low volumes of properties.
04:38So let's dig a little bit more into what the dominance of those
04:46small local buyers at auction means for the actual communities.
04:50Yeah. Yeah. They're, they're, they're having a positive impact on the communities. And I think
04:55it's a measurable positive impact. If we look at home ownership rates as one, uh, and there's this
05:01belief too, that at auction, most of these people are buying the properties, holding them as rentals,
05:06building their rental empire. And there's certainly some of that going to on, but 55% of our buyers
05:11there that say their main strategy is to re renovate the property and resell it specifically to owner
05:17occupants. And we actually, we don't just believe our buyers. We look at the data and say,
05:22when a property sells on our platform, what happens to it? And about, uh, over 60% of the properties
05:30resell. So they're reselling back in the market. And of those resales,
05:3579% are going to owner occupants. So it's a pretty high ownership rate. That's, that's one of the things
05:41they're adding value to these properties through renovation. Uh, there's, there's, but they're doing
05:46it pretty efficiently. They're taking about six to nine months on average to renovate the properties,
05:50get them back into productive housing supply. So the other thing we see, the objection is that these
05:57folks are renovating the properties, maybe gentrifying communities, pushing out the local buyers.
06:02What we see is actually these homes, once they're renovated are still very affordable.
06:07The average sale price over the last 10 years of a renovated foreclosure that was originally
06:11purchased on auction.com is around $237,000. That's about 32% below the average sale price of
06:19all properties over that same timeframe. And then if you look in underserved, a high percentage of our
06:24properties are in what's known as underserved neighborhoods, which are either low income or
06:29minority neighborhoods. And in those neighborhoods, the average price is around 202,000 and in
06:36opportunity zones where our properties are, uh, sold, the average price is 185,000. So these are
06:43still on the affordable side of the, the housing spectrum. And, uh, and on top of that are our buyers.
06:50So they're helping homeownership rates. They're improving the values of the homes,
06:55but keeping them so affordable. And then they're adding jobs to the community as well.
06:59So you talked in several of your answers at this point about the opportunity for owner-occupants.
07:06What realistically can be done to increase access for owner-occupants to foreclosed
07:14homes at auction?
07:15Yeah. And I think there is some, I think there's some limited things that can be done, but at the
07:19end of the day, some of these properties are not good fits for owner-occupants. At least most
07:22owner-occupants because they, uh, they're highly distressed properties. You're buying them sight
07:27unseen with no interior inspection. So you're having to buy with cash. And so that main, and,
07:32and about half of them are occupied. And so that may mean that as an owner-occupant buying the property,
07:39you're going to have to take care of the current occupant of that property, which a lot of owner-occupants
07:44are not really equipped to do. So I, that's kind of the caveat is a lot of the, these local
07:51community
07:52developers who are buying them are a great bridge from taking that property from distress
07:57to productive housing supply. But getting to your actual question, the owner-occupants,
08:02I think one of the things you can do is first of all, not prolong the foreclosure process that we've
08:09seen during COVID, the foreclosure process was very elongated. And so then you end up with, uh,
08:16more highly distressed houses that, uh, and less supply you're holding back supply for the market.
08:21And I think that's one thing. Another thing that can be done is just a very transparent auction
08:25marketplace, which that's kind of our mission is to bring transparency and innovation to the
08:31foreclosure auction, which in the past was just the domain of the, a few like people who knew about it.
08:37We called it collusion corner. If you went to these foreclosure auctions, there's just a group of,
08:41uh, guys in, in, uh, cargo, cargo shorts, maybe colluding with each other to buy these properties.
08:49We're bringing transparency to it and innovation means it it's more inclusive. It brings more buyers
08:55in, including these owner-occupant buyers. I was, I was just talking to one in, uh, who,
08:59who is an owner-occupant bought in Chattanooga, Tennessee. And she went there, she was intimidated.
09:06Oh, she thought she would be intimidated, but once she saw the, our staff there, they were willing to
09:11answer her questions and she ended up winning the bid and everybody clapped for her. So it was kind
09:15of that. That's another way is transparency in the actual auction environment. And then the third
09:21thing is possibly looking at first look auctions where you have a limited period, exclusive period
09:27for just first time homeowners and maybe some other folks who qualify to, to buy the property.
09:34The previous administration tried that this, this Trump administration, actually one of the first
09:39things they did is they scrapped the first look, but now they're talking about it again. I think there is
09:44some lift from those first look auctions, but you have to be a little careful with them because
09:49that can turn into abuse as well in my, in my view, because you're just limiting the buyer pool for
09:55those properties. So you've mentioned auction.com's data, and I want to spend a little bit of time
10:03talking about the trends that you're seeing and the data that you have access to specifically around the
10:11foreclosure markets role in the overall market. Yeah, I think, um, I'm not sure if this answers
10:20the question exactly, but I wanted, I want to say this, you know, I think that foreclosures in the
10:25scope of the housing ecosystem, they're the wolves of the housing ecosystem. So if you think about
10:30Yellowstone National Park, once they reintroduce wolves into it, they were in, you know, they were kind
10:36of a date, they were a very important part of that ecosystem. They actually changed the way, once
10:41they reintroduced wolves, it changed the balance of life and also even changed the geography to a
10:49certain extent. And so I take that analogy, maybe it's taking it too far, but I think I see foreclosures
10:55as you don't want a lot of foreclosures for sure in a housing market. That's what, that's what we saw
11:00in
11:002008 and following. But a certain level of foreclosures is necessary in a market that relies
11:06so heavily on real estate financing. You have to have that, that outlet to take distressed
11:15properties and recycle them back into the market. And that's what I see foreclosures doing. So I
11:20think when we see this rise in foreclosure volume, I'm not alarmed by it because we're still at very
11:24low levels. And I actually think it's actually, it's bringing balance and health to the housing market
11:29by taking these properties. There's over 50% of our bank owned auctions are vacant properties,
11:36so they're just sitting there, not doing anything for the housing market. And so we're returning
11:40that as, as productive supply to the housing market, I think is very important.
11:46I, I have to agree with you. And I, I love the analogy. I think the analogy is fantastic.
11:54So my followup to that is what trends should industry leaders really be paying attention to
12:01in order to anticipate any shifts that we might see this year.
12:06Yeah. And the, I think it's the same thing for the, for the retail market as for the distressed
12:12auction market is mortgage rates and housing supply. Those are the two metrics, I think,
12:18to look at from the point of view of servicers and others in the industry. If we see mortgage rates
12:26flatten or even go down a little bit this year, I think that'll bring more demand at the foreclosure
12:31auctions. We've seen a little bit of weakness at demand. They're mostly because of a pricing mismatch.
12:38And so mortgage rates is one. And then housing supply, our buyers are very sensitive to the
12:43retail market housing supply. If, cause they're selling back into that market. So once they buy a
12:49property, if it's taking them instead of six months, it's taken them 12 months to get that property
12:53sold. They're going to be able to buy less at foreclosure auction. So in markets where like
12:59the Southeast and Sunbelt, where we see supply coming up, our buyers are pulling back a little
13:04bit because they don't have the capacity and it's taken them longer to return those properties to the
13:09market. So when you look ahead, where do you see the greatest opportunity for the foreclosure markets
13:18to support housing supply and affordability? Yeah, I think, so I think that more of what
13:26I've talked about, more transparency at foreclosure auction is great. And that's produced better outcomes
13:33for servicers in terms of lower loss severity. It's produced better outcomes, even for the distressed
13:38homeowners who are losing their homes. They're walking away sometimes with equity because the price at
13:42auction has gone above the total debt that's owed on the property. But I would actually say that the
13:48biggest opportunity that we're looking at is prior to foreclosure. Distressed homeowners who are facing
13:54foreclosure, many times they still have equity in their homes. There's an opportunity for them to sell
14:00that home, avoid foreclosure and walk away with equity in a sale that's not a forced sale like a
14:07foreclosure sale, but a sale that they control. And so I think we call it pre foreclosure sales. I think
14:13that's the opportunity that's, we have a program now called smart sale, where individual homeowners
14:18can come and post their properties for sale on auction.com. And we're starting to see more volume
14:23come there. But I think that's an opportunity for the industry to, prior even to foreclosure,
14:30to address things and make, you know, at the end of the day, that will help lower foreclosure volume,
14:37which is, I think, a good thing for the market and take care of that distress earlier
14:41in the process rather than waiting for that forced foreclosure sale.
14:44Well, Darren, thank you so much for joining me today and for walking me through what we should
14:49be paying attention to, what the auction.com data is showing us, giving us a little myth busting,
14:56talking us through misconceptions about what distressed sales actually look like, what those
15:01actual people who are buying them look like. So I appreciate you giving me time today,
15:05and we'll hear more from you soon. Thank you so much.
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