ElPato
Posts:351
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| 10/09/2008 11:54 AM |
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Article source here
Finally builders are getting desperate enough to do "no reserve" auctions. This is an improvement over the REDC scam of last year. Now if we can just get them to drop the "minimum bid" baloney, I might actually attend and bid.
The deals are coming, be patient! |
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jakob
Posts:473
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| 10/11/2008 9:16 PM |
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I went to the Ocean Pacific auction tonight. (auctionmissionbeach.com) It was big professional production. It must have cost a pretty penny to put on, with all the open houses for 2 weeks too. They had a dozen escrow officers waiting to ink deals. Pretty good crowd of about 25 bidders with numbers. You had to be prequalified and have a cashiers check of $5000 to bid. Unfortunately for the auction company, the night didn't go so well. They only got through 9 of the 24 units. 3 got bid on, each for minimum bids and one of those had an undisclosed reserve.
Here's how the auction went down:
3785 Ocean Front Walk #1. 713sf 1br/2ba. Sold for the opening price of $1,115,000. (previous price 1.9m)
3786 Strand Way #1. 1415sf 3br/3.5ba. Started at $1,850,000. No bids. (previous price 2.6m)
3785 Ocean Front Walk #2. 930sf 2br/3ba. Started at $1,395,000. No bids. (previous price 2.2m)
3725 Ocean Front Walk #3. 340sf studio. Sold for opening price of $495,000. (previous price 825k)
3725 Ocean Front Walk #6. 307sf studio. Started at $425,000. No bids. (previous price 675k)
3607 Ocean Front Walk #7. 1278sf 2/3. Sold for opening price $1,695,000. (previous price 2.4m) Undisclosed reserve on this one, likely not met.
3607 Ocean Front Walk #1. 1097sf 2/3. No bids at $1,895,000. (previous price 2.4m)
3607 Ocean Front Walk #2. 1147sf 2/3. No bids at $1,695,000. (previous price 2.2m)
2123 Garnet #2. 800sf 2/1. No bids at $235,000. (previous price 475k)
At this point the CEO of Accelerated Marketing (the auction company) came out and canceled the auction, saying there weren't enough bidding action to warrant continuing. He said anyone who wanted to make an offer could come and do it in person. He looked distraught. |
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jpinpb
Posts:1450
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| 10/11/2008 9:48 PM |
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| So we can say the night was somewhat of a flop? Seems still overpriced, yet quite a drop from peak. |
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jpinpb
Posts:1450
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| 10/11/2008 9:49 PM |
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| Thanks for posting the info, jakob. |
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wilson
Posts:541
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| 10/11/2008 10:00 PM |
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| In retrospect, they probably chose the absolute worst week to have their auction with stock market tanking. |
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Dirtcheap
Posts:28
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| 10/11/2008 10:16 PM |
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| The worst possible timing, they should have postponed it for a few weeks at least. |
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jakob
Posts:473
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| 10/12/2008 6:45 AM |
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Yeah, the timing was unfortunate. The hosts made some comments about the stock market and said how much better real estate is as an investment you can actually feel and touch. And how the homes presented were "deals of a lifetime" and that "the place was here and the time is now to make it happen."
Yes, 2 homes getting sold for min bids out of 9 auctioned is a flop. The fact that they pulled the plug after a third of the houses says it all to me. |
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jpinpb
Posts:1450
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| 10/12/2008 8:58 AM |
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These places weren't selling and the market had been sluggish for a while. Most of us on this board have been saying so far this year is the worst is yet to come. It was obvious to many of us and if people selling were paying attnetion, it should be obvious to them. This auction should have been held earlier in the year to get a jump on it. It's just spiraling down the drain and postponing it a few weeks, IMO, isn't going to help get a sale. Banks are continuing to tighten credit. I just read you have to have over 750 to be considered a good credit risk. Most of what you posted are very high-end properties and there's a low percentage of the population that command that kind of purchase. I see more reductions on the horizon. I don't know when people will concede how bad it really is.
But some people say the coast is immune and location, location, location. |
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BigTrace
Posts:194
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| 10/12/2008 9:03 AM |
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Wow !!. If this doesn't make you think about the elevated prices, nothing will. Those minimum bids were probably down at total property cost. OPP may go under now. Watch for these properties later to sell for another 20-30% less. Might be a good deal to swoop on then.
Thanks Jakob for the post. Very informative. |
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jpinpb
Posts:1450
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| 10/12/2008 9:14 AM |
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| OPP = Over Priced Properties. |
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BigTrace
Posts:194
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| 10/12/2008 9:20 AM |
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| I thought it was Other Peoples P****. Oh yeah, that was a song a while back.... |
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ElPato
Posts:351
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| 10/12/2008 11:21 AM |
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jakob:
thanks for posting this review. I read in the UT that OPP paid Accelerated Marketing $400K for this auction. I can't imagine either of them are pleased at this point :)
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jpinpb
Posts:1450
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| 10/12/2008 4:45 PM |
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| OPP had a big hand in bringing up the artificially overinflated comps in 92109, the median/average ppsf. They will need to reduce to sell and that will contribute to further declines in the 92109. |
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jakob
Posts:473
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| 10/12/2008 5:03 PM |
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Wow, I can believe it was 400k. They said at the auction that lenders (a different one for each of the buildings) had approved the reserve prices. That makes me think they are already in short sale territory! And there are another 4 or so buildings with many more units under construction by OPP. I don't see how their lenders will get repaid...
And what about the poor guys who paid 800k for a studio in 2007 that is worth less than 400k now... |
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jpinpb
Posts:1450
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| 10/12/2008 5:13 PM |
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| I was skating down there today and saw all the open houses and all the unfinished projects. Biting off more than they could chew. Not selling what they have and starting other projects. I mean, pretty much everyone knew this market was heading south this year. Why start other projects when you have inventory not moving? Do they think the bailout will unleash money to people to buy? I don't think so. My friend said the 700 billion was like throwing a cork in a swimming pool, olympic-size swimming pool. I wonder if OPP will even finish the probjects they started. Should be interesting to see what happens. |
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punstress
Posts:123
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| 10/12/2008 8:56 PM |
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| Wow, I realize it's Ocean Front Walk and all, but over $1 million for a 713 sf 1BR? A 340 sf (340 sf!!! that's 17x20!) studio for a half-million?! I'm surprised they sold even one. |
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wilson
Posts:541
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| 10/12/2008 10:26 PM |
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| 17'x20' is about the size of 2 parking spaces |
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