Its proving that previous big gains in the real estate market by the auction industry are not going to be topped this year. With big gains in the last 5 years, and growth in the last 6 in the real estate market crisis the National Auctioneers Association is reporting a decrease of 2.7% in real estate auctions despite growth of 2.3% in the live auction business. As we hit what may be the worst of the housing and mortgage crisis that comes as somewhat of a surprise to some that felt the auction industry would see gains again this year. At this point I think and agree with Tommy Williams assessment of the challenges auctioneers are now seeing. As values have continued to fall we are at a point where sellers are just not willing to accept that their home could actually be worth what the market is bringing today. Despite the relatively small decrease in real estate auctions this year they are still at an all time high and a very valuable option for many sellers.
While these statistics are all national industry wide stats I think it would be interesting to see a state by state breakdown which isn't possible. If my suspicion is correct you would actually see gains in real estate auctions in some states and losses in others. Without any hard numbers or facts to back it up the best I can say is that, at the very least the number of real estate auction in Iowa has increased this year and I've seen more and more auctioneers jumping into the real estate business. As an auctioneer I'm also seeing more and more Realtors taking notice and partnering with auctioneers to get homes sold here in Iowa. I guess we'll never know for sure but my suspicion is that real estate auctions are more popular than ever here in Iowa.
Below is a release from the NAA about the current state of the auction industry as reported at this years national convention.
National Auctioneers Association Estimates Industry to Grow 2.3 Percent in 2008
Decrease of 2.7 Percent Reported in Residential Real Estate Market
Nashville, TN, July 9, 2008 - During the opening session of the 59th International Auctioneers Conference and Show in Nashville, Tennessee, Dr. James Leiman of Morpace, Inc. announced the results of the industry's mid-year report to the members of the National Auctioneers Association. Dr. Leiman reported that if current consumer trends continue within the live auction industry, gross sales will grow 2.3% in 2008. The 2.3% percent growth during the first half will result in estimated gross sales of goods and service sold at live auction totaling $276.8 billion. This translates to six consecutive years of growth within the industry. In 2007, the live auction industry grew 5.3% with over $270 billion in goods and services sold by auctioneers in the United States.
While automobile auctions continue to dominate the industry with $87.8 billion in gross sales in 2007, the fastest growing sector of the live auction industry is real estate auctions. Real estate auction sectors include: residential, commercial/industrial and land/agricultural. In 2007, the auction industry sold approximately $58.5 billion in real estate assets. Total sales growth within residential real estate auctions has grown 46.6% between 2003 and 2007. Dr. Leiman reported that the pace of real estate auctions has slowed and gross sales have decreased in the first half of 2008. Gross sales in residential real estate decreased 2.7% in residential real estate, 7.1% in commercial and industrial real estate, and 2.3% in land and agricultural real estate.
"While auctioneers have witnessed tremendous growth in real estate auction sales over the past five years, auctioneers are witnessing more challenges in today's housing market," said NAA president Tommy Williams, CAI. "Auctions set the market value and sellers are uneasy with the realization that their property is only worth what the consumer is willing to pay and are concerned about a loss in their properties market value. In addition to seller apprehension, today's buyers are concerned with purchasing assets in an uncertain economy and do not see eye-to-eye with sellers on the true market value of their property."
Every January, the National Auctioneers Association unveils its annual end-of-the-year report to the public. This report provides and overview of the industry, as well as highlights growth within sectors of the auction industry (i.e. real estate, charity, art, antiques and collectibles, etc.). To view a copy of the past three years of reports visit www.auctioneers.org and click on Auction Industry Stats.
