Foreclosure auctions rose while buyer demand and pricing cooled in Q3 2025. Below, we’ll take a look at six key charts and buyer quotes to get a sense of today’s foreclosure market, what’s going on at auction, and extra tidbits to help guide your next bid.
Foreclosure auction volume increased while pricing softened in Q3 2025, according to the latest Auction Market Dispatch, published by Auction.com. That combo is creating more chances to buy—if you underwrite conservatively and stay selective. Here are six must-see charts and auction buyer insights.
What Changed For Investors This Quarter?
Distressed supply continued to climb, led by foreclosure completions and scheduled auctions, while demand metrics (sales rates and bidders per asset) cooled. Investors report shifting to lower bids and longer hold timelines as costs and uncertainty rise.
“The primary concern is the growing number of houses for sale … This creates a buyers’ market; therefore, you can expect to sell a property for less than you would have a year ago.” — Arkansas buyer
Takeaway
More foreclosure inventory with more conservative bidding favors disciplined offers.
Where Demand Cooled—and Why That Helps Disciplined Buyers
Sales-rate pressure and fewer bidders per asset mean less competition at the margin. Many buyers cite falling prices and policy uncertainty, so they’re trimming offers to protect their margin.
“Overall, expectation [is that] housing prices are falling and will continue to fall.” — Indiana buyer
Takeaway
If you keep comps current and cap rehab risk, you can win without overpaying.
What Buyers Actually Paid vs. Value (by Market)
Price-to-after-repair value (ARV) ratios moved lower in several metros, reflecting tighter underwriting and higher perceived risk. That creates pockets where spreads are opening for buy-and-hold and value-add investors.
“I am buying more to hold and rent than I was before (when) I was buying to flip and sell.” — Minnesota buyer
Takeaway
Favor metros where price-to-ARV is trending down and rents still pencil.
Where Supply Is Building (by State)
Foreclosure auction volume rose across several large states. A bigger pipeline means more looks each week and less pressure to chase borderline deals.
Takeaway
Work statewide lists; set saved searches for areas showing the biggest year-over-year gains.
Vacant REO Is Back in Play—Why Occupancy Status Matters
The number of vacant REO auctions is at a multiyear high. Investors often prefer vacant assets to avoid eviction delays and carrying costs. And vacant REOs represent a largely untapped affordable housing opportunity for owner-occupant buyers.
“Occupied versus vacant properties is a big one for me… It’s been extremely hard…to evict.” — California buyer
Takeaway
Prioritize vacant REOs when speed to possession matters; price occupancy risk in.
Bid-Ask Spread Rises at Foreclosure Auctions
Seller “ask” moved down, but buyers also pushed bids lower, keeping a noticeable spread. That’s a sign to keep offers tight, not chase.
“[I’m] bidding lower prices to hedge for declining prices and climbing inventories.” — Texas buyer
Takeaway
Use your max-offer formula (ARV × target discount – rehab – fees – margin), and stick to it.
Auction Market Dispatch FAQ
What is price demand?
It’s the winning bid as a percent of after-repair value (ARV). Lower = bigger gross discount.
Is it still worth bidding right now?
Yes—rising supply plus cooler demand creates opportunities, especially for buy-and-hold investors. The key is conservative underwriting and solid rehab plans.
Flip or rent?
With spreads tighter and rates elevated, some investors are leaning toward rent-and-hold to let time de-risk the trade.
