Mobile app views point to more than 5 percent annual increase in existing home sales in January, as more buyers taking advantage of remote bid service to buy beyond their backyard.
Buyer interest in the January “Super Tuesday” foreclosure auctions in Texas and Georgia point to a strong start for the housing market in 2020, predicting a more than 5 percent annual increase in existing home sales in January.
Views on the Foreclosure Interact™ feature of the Auction.com mobile app jumped 51 percent on Tuesday Jan. 7, 2020, compared to the previous day to a new single-day record for views since the feature was launched in September 2018.
A regression analysis of Foreclosure Interact views and existing home sales as reported monthly by the National Association of Realtors shows a strong positive correlation (0.94) between Super Tuesday Foreclosure Interact views in a given month and the annual percentage increase in NAR existing home sales in that same month. Also strongly correlated are the monthly percentage change in Foreclosure Interact views and the monthly percentage change in NAR existing home sales.
This regression analysis predicts NAR existing home sales will increase 3.3 percent in January from December and will be up 5.6 percent from January 2019, when the housing market was mired down by rising mortgage rates. The accuracy of those predictions can be checked on Feb. 21, when the NAR numbers for January are published.
Strong Distressed and Retail Demand
The 51 percent daily spike in mobile app views on Jan. 7 — the first Tuesday of the month when all foreclosure auctions for the month are conducted in Georgia and Texas, also known as Super Tuesday — was the biggest Super Tuesday daily increase since September 2019. January Super Tuesday views were up 27 percent compared to December’s Super Tuesday views, the biggest month-over-month increase since February 2019
Given that Auction.com accounts for close to 50 percent of all foreclosure auction sales nationwide, the sharp increases in views on Foreclosure Interact — which allows prospective auction buyers to engage with live foreclosure auctions from their mobile devices — certainly indicates strong demand from real estate investors and other distressed property buyers to kick off the new year.
Furthermore, the strong correlation between mobile app views and NAR existing home sales shows that demand in the distressed market is also a reliable leading indicator of sales strength in the larger retail housing market.
Remote Buyer Ripple Effect
Not surprisingly, the top three metro areas with the most Foreclosure Interact views on Jan. 7 were all in Georgia and Texas: Atlanta, Dallas and Austin.
But six of the top 10 metro areas with the most screen views were outside of Texas: New York, Phoenix, Los Angeles, San Francisco, Seattle and Chicago. Four of those six cities posted month-over-month increases in screen views that were above the national average: New York (up 35 percent); Phoenix (up 69 percent); San Francisco (up 28 percent); and Seattle (up 117 percent).
Additionally, eight of the top 10 metro areas with the biggest month-over-month increase in Foreclosure Interact screen views on Jan. 7 were outside of Texas and Georgia — among metros with at least 500 screen views for the day. Boston led the way with a 130 percent increase followed by Seattle, Sacramento, Buffalo, Phoenix, Orlando, St. Louis, Miami and Nashville, all of which posted month-over-month increases of more than twice the national average of 27 percent.
The out-of-state increases in Foreclosure Interact views on Super Tuesday indicates that these events are attracting interest even from real estate investors living outside the two states where Super Tuesday auctions occur. That’s somewhat surprising given that prospective bidders typically need to be physically present at the foreclosure auction events — or have a proxy bidder present — to bid on properties brought to auction.
But increased access to data and technology are helping investors become more willing and able to buy properties beyond their backyard. For example, Auction.com has created a remote bid service that allows buyers to bid from a remote location in certain counties if they can’t make it physically to the auction event. Through this service, a bid is placed on the property for the remote bidder. The share of remote bidder views on Foreclosure Interact has grown steadily each Super Tuesday since the mobile app began tracking remote bidders in June 2019.