Investors pay almost half price at Texas foreclosure auctions
The average home sold at a foreclosure auction in north and central Texas went for 57 cents on the dollar in March. Foreclosure Listing Service, based in Addison, Texas, studied successful bids and purchases at foreclosure auctions in 18 counties around the Lone Star State. The firm found the average amount successfully bid and paid at these auctions was $98,563, even though the average assessed home value was $161,606. "Investors and other buyers at the March foreclosure auctions successfully bid on and purchased properties for an average of just 57 cents on the dollar," said George Roddy, president of FLS. "This is the most remarkable period for buying at the foreclosure auctions that I have ever seen." Roddy said about 25% of total residential foreclosure postings filed during March were auctioned off to investors, lenders and third-party buyers alike. A total 2,121 homes were successfully bid on and purchased during the month, down 6% from a year earlier. About 6% of sales went to third-party buyers, which are typically investors but can include families looking for a good deal on a home, Roddy said. He expects auction purchases to increase throughout this year. "I am very sympathetic to that fact that the word ‘foreclosure’ means two very different things. To the investor or buyer, it means the potential for a great investment. But, on the other hand, to the family that has lost their home as a result of foreclosure, this is most likely the most devastating thing they have been through," Roddy said. "I expect this to be a great year for the investor or home purchaser who is in a financial position to be buying distressed properties at any stage in the foreclosure process." Texas has been on the forefront of recovery in the housing industry, as existing home sales increase and foreclosure postings fall. The Federal Reserve Bank of Dallas said home sales from July 2010 to January 2011 increased in every Texas major metropolitan area for the first time since the homebuyer tax credit expired. FLS reported that foreclosure postings for the January to April auctions fell 4% compared to the same period of 2010. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.