Foreclosure Auctions in Texas and Georgia in August Point to a Bounce-back in Home Sales.
Buyer interest in the so-called “Super Tuesday” foreclosure auctions in Texas and Georgia in August point to a bounce-back in home sales after what has been a sluggish summer so far.
Views on the Foreclosure Interact™ feature of the Auction.com mobile app spiked 59 percent on Aug. 6 — Super Tuesday for the month — compared to the previous day, giving August the biggest Super Tuesday lift since February 2019, when screen views jumped 65 percent compared to the day before. In the five months between February and August, the average Super Tuesday lift was 44 percent.
Given that nearly 50 percent of all foreclosure auctions nationwide are sold through the Auction.com platform, an above-average Super Tuesday lift in views on the Foreclosure Interact feature — which allows prospective auction buyers to engage with live foreclosure auctions from their mobile devices — indicates elevated interest from real estate investors buying with cash at these once-a-month foreclosure auctions in Texas and Georgia.
That is good news for lenders selling distressed properties in those venues, and it’s also a good bellwether for the strength of the overall retail housing market. According to an Auction.com analysis[i] of Super Tuesday mobile app usage and existing home sales data from the National Association of Realtors, there is a strong positive correlation between lift in daily screen views on Super Tuesday and month-over-month change in U.S. existing home sales.
The Super Tuesday Barometer
Following the February 2019 Super Tuesday spike of 65 percent, NAR reported the next month that existing home sales had jumped 11 percent from January to February, the biggest monthly increase since December 2015. But in March, following a below-average Super Tuesday increase of 31 percent in Foreclosure Interact screen views, existing home sales posted a 5 percent month-over-month drop.
Interest picked up a bit for the Super Tuesday foreclosure auctions in April and May — both months posting a Super Tuesday spike of more than 50 percent — and existing home sales stayed steady in April and rose on a month-over-month basis in May.
Below-average Super Tuesday interest in June foreshadowed a nearly 2 percent monthly drop in existing home sales that month, and another below-average showing of 37 percent in July likely means that news out of the NAR will be disappointing later this month, particularly given the recent move by the Federal Reserve to lower the Federal Funds interest rate.
But the Fed’s move occurred on July 31, meaning it had no psychological or real impact on prospective buyers in July. However, the big jump in Super Tuesday interest in August indicates that the Fed’s move is helping to boost confidence in the housing market on the part of real estate investors.
More Super Tuesday Inventory
Another factor in helping to spur more Foreclosure Interact mobile app views in August was more inventory available for sale at the Super Tuesday foreclosure auction events. Auction.com data shows a total of 2,946 properties scheduled for auction on Aug. 6 between Texas and Georgia combined, up 27 percent from July and up 14 percent from a year ago.
Rising inventory may also be helping to facilitate more sales in the larger retail market. Since bottoming out at a 3.6-month supply in February of this year, the months’ supply of existing home inventory has been rising and was up to 4.4 months in June.
Super Tuesday Ripple Effect
Although Super Tuesday foreclosure auctions occur only in Texas and Georgia, they attract attention from across the country, according to the Foreclosure Interact data from the Auction.com mobile app.
Among the top 15 cities with the most views on Aug. 6, the biggest Super Tuesday lift came from users located in Texas and Georgia cities, but some cities outside those two states also saw sizable jumps in user interest. Those cities included Phoenix (139 percent increase in screen views on Super Tuesday), Charlotte (211 percent increase), Sacramento (102 percent increase), Birmingham (102 percent increase), and San Francisco (67 percent increase).
Other cities posted just a slight increase or even a decrease in screen views on Super Tuesday, including New York (5 percent increase), Chicago (22 percent decrease), Los Angeles (24 percent decrease), and Nashville (1 percent increase).
[i] Analysis was of daily screen views on the Foreclosure Interact feature of the Auction.com mobile application going back to September 2018. The 10-month analysis shows a strong positive correlation of 0.84 between the Super Tuesday mobile app lift in daily screen views and the month-over-month change in existing home sales.