Brief Why Do So Few People Buy Affordable Properties at Auction?
Jung Hyun Choi, Laurie Goodman, Liam Reynolds
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Distressed properties can offer a path to affordable homeownership. With the pandemic-era forbearance ending, we can expect many properties to enter the market as distressed sales, a sizeable number of which will flow into the auction space. Despite more favorable pricing, only 25 percent of auction sales are initially sold to owner-occupants. Auction sales pose a number of barriers to would-be owner-occupants that are not easily overcome, including financing, the risk of substantial repairs being needed, removing current occupants, and the inability to see a property before the auction. This report offers an analysis of auction sales in 2019 and 2020, and it includes a set of policy options that could make distressed sales via auctions accessible to more potential homebuyers.

Research Areas Housing finance Housing
Tags Federal housing programs and policies Housing and the economy Homeownership Housing affordability
Policy Centers Housing Finance Policy Center