Residential Magazine

Owner-occupancy rates rise with online auctions

By Daren Blomquist

As more U.S. properties gradually reach the foreclosure stage in 2022, technology-enabled transparency will ensure that the bulk of these distressed assets are sold to community developers and investors. This in turn will allow for responsible rehabilitation of these homes so that they can be converted into quality, affordably priced properties — primarily for owner-occupants.

Anecdotal evidence provided to shows that small, local investors are interested in enhancing their communities through improvements to real estate. Fix-and-flip investors in states such as Ohio have been able to purchase multiple properties within the past year, with many of these rehab projects being resold to owner-occupants.
Ohio and Florida are the only states where online foreclosure auctions are permitted by state law. Ohio changed its foreclosure statutes in 2016 to allow for online auctions. The revised law allows for both online auctions conducted by private selling officers (similar to court-appointed auctioneers) as well as the traditional, in-person auctions conducted by county sheriffs. This two-pronged approach has created a natural, experimental environment for testing the impact of online-auction technology on post-foreclosure homeownership rates.
From 2017 through September 2021, 56% of foreclosure properties sold via online auction in Ohio were owner-occupied, according to data. That’s three percentage points higher than the owner-occupancy rate for homes sold at the traditional in-person foreclosure auction.
The owner-occupancy rate disparity is even higher for properties sold at foreclosure auction in 2021 alone: 51% for online auctions compared to 39% for in-person auctions. Given that many properties purchased by fix-and-flip investors through the first nine months of 2021 hadn’t been resold as of this writing, this indicates that a higher share is being sold directly to owner-occupants at online auctions versus in-person auctions.
When a property doesn’t sell at foreclosure auction, online-auction technology also can be leveraged to sell the property as an REO (real estate owned by the foreclosing lender). Unlike foreclosures, where a property is still in the process of being repossessed by a lender, REOs can be sold via online auction in all states. Historically, however, many REOs have been sold on the traditional retail market through a multiple listing service.
null data shows that 13% of REO auction sales in 2021 involved buyers who identified themselves as owner-occupants, up from less than 12% in 2020 and the highest share since 2012. The same data shows that less than 1% of last year’s REO auction buyers identified themselves as investors in multiple properties, the lowest level in the history of the dataset.
The numbers show that nearly nine in 10 REO auction buyers (89%) in 2021 purchased only one REO property during the year. While a growing number of these single-property buyers are owner-occupants, the majority are local developers who purchase and rehab roughly one property per year before reselling the bulk of these homes to owner-occupants. An analysis of more than 20,000 properties resold since 2017 after being purchased at REO auction shows that 66% were owner-occupied as of September 2021, according to public assessor records. ●


  • Daren Blomquist

    Daren Blomquist is vice president of market economics at In this role, Blomquist analyzes and forecasts complex macroeconomic and microeconomic data trends to provide value to both buyers and sellers using the platform. Blomquist has been cited by thousands of media outlets nationwide, including major news networks, The Wall Street Journal, The New York Times and USA Today. Prior to, Blomquist worked at Attom Data Solutions.

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