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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 24 August 2025 F E A T U R E S T O R Y THE RESURRECTION OF VACANT REO AUCTIONS: GOOD NEWS FOR HOUSING B y DA R E N B L O M Q U I S T T he number of vacant properties available for bank-owned auction rose to a more than four-year high in the first quarter of 2025, according to Auction.com data. That's good news for prospective auction buyers who are less experienced and more risk-averse— including owner-occupants. It's also good news for community revitalization and local housing market health. Vacant properties contribute to neighborhood blight the longer they sit vacant but often represent affordable hous- ing inventory once renovated and returned to the retail market by auction buyers. "I don't understand when a property is vacant for a year or two years, why they keep postponing the sale," said Landon Cunningham, VP of Client Relations at Tenet Capital, a Spokane, Washington-based lender that provides financing for buyers at auction. "Those houses are going to become more and more dilapidated. More crime, more people squatting in that house." Cunningham noted that when vacant foreclosures are renovated, it's a win-win-win for the neighborhood, local economy, and new homeowners. "The neighbors are happy, you are providing jobs to the contractors, and somebody has a nice house they can move into," he said. More than 5,000 vacant REO (real estate owned by the foreclosing bank) properties were available for bidding in the first quarter of 2025 on Auction.com, up 4% from the previous quarter and up 11% from a year ago to the highest level since the third quarter of 2020—soon af- ter the onset of the COVID-19 pandemic. Vacant properties represented 53% of all REO auctions in the first quarter, the highest level since Q4 2021, when the nationwide foreclosure moratorium on government-backed mortgages expired. Vacant properties were exempted from the moratorium, so they represented a bigger share of a smaller REO auction pie in 2020 and 2021, when the moratori- um was in effect. From Vacant to Owner-Occupied U ntil they're sold, vacant REOs represent risk for the surrounding neighborhood as deferred maintenance issues pile up and the property becomes a magnet for vandalism. On the flip side, these properties also represent latent opportunity for the local housing market. Once sold to a local community developer at auction, they can be trans- formed into quality, affordable housing. "It had been vacant for quite a while … probably a year, so it was not very well taken care of," said Auction.com buyer Francois Delille about a Houston-area property he purchased at auction in 2022. Following renovations, he returned the property to the retail market as a rental. "The house being vacant, that's such a waste. … If that house had been to auction six months earlier, it would have been rented six months earlier. " D A R E N B L O M Q U I S T is VP of Market Economics for Auction. com. In his role, Blomquist analyzes and forecasts complex macro- and microeconomic data trends within the marketplace and greater industry to provide value to both buyers and sellers using the Auction.com platform. Blomquist's reports and analysis have been cited by thousands of media outlets nation- wide, including the Wall Street Journal, the New York Times, and USA TODAY, and on many national network broadcasts, including CBS, ABC, CNN, CNBC, FOX Business, and Bloomberg.