Property Auctions

[Smiling JOe]

I guess I am terribly naive but it seems to me that if you put your property up for auction, you suck it up and sell for what your property goes for at gavel. Otherwise, you stick the little 'for sale' sign in the sand, pay your taxes and wait for a bite.

If I were auctioning one of my properties, I would not do so without a reserve, especially these days. I doubt if any of the 21 properties at Saturday's auction were without reserve.

 

[Franny]

You are right SJ there were no absolutes at the auction unlike the upcoming auction this weekend. Also Cork, the beachfront bid was NOT accepted at the auction for a high bid of 1.25m.

 

[ecopal]

The poor results at the auction may just reflect current market conditions. The mindset of many buyers now is "either take my low offer or I walk and wait".

 

[beclareesq]

Does anybody else think that this auction reflects the current state of the market? Supply would appear to far outdistance any demand. What demand there is is trying to establish the "market" far below asking prices. Sellers still have the luxury of holding and so they do. Soon there likely will be some that don't and so they won't. Only then will the "market" be established. The only logical reading of the current situation is that the market is in a downward transition, the only mystery remains the depth. I take that back, I think it is a mystery that there are so many units on the market, in today's climate, offered by sellers who don't seem to want to accept the reality of the market. Why don't they pull the units off and lower the supply numbers? They are helping to create the very momentum they refuse to recognize. That is a second mystery.

 

[Babyblue]

Hello group! Sorry I have been out of town since the auction. I was there and it was standing room only. Buyers from out of state as far as Texas. All of the other auction companies were there looking on. I do not know how many sold but seemed like a few. Hey but one sale in hour and half is not bad compared to months years on the market. I think I counted 15 buyers or bidders. Any way that is all I have to report other than based on the bids, the boom is over.

 

[Beachlover2]

Why don't they pull the units off and lower the supply numbers? They are helping to create the very momentum they refuse to recognize.

This is so true in my opinion. If you aren't intent on selling - then why are you listing.
Oh and by the way I am a half full person.

 

[ecopal]

I have heard that some sellers are being pressured by their neighbors not to list or sell too low or it will hurt the neighborhood's market value.

However, flippers stuck with a buildout time lot are either going to have to sacrifice their lot at a low price or build. In Watercolors lot owners are having to pay $2500.00 a month for every month they do not build after the deadline start date in their contract.

 

[SHELLY]

So if bids were half of market price (by all reports) and that was half of what sellers were hoping for, it sounds like sellers were hoping to get market price.

Would like to know if there was any of the properties where the seller was willing to take 70-75% of market price? My thoughts are that since the property could sell as low as 90% on the open market, when you subtract the additional 13% the buyer is paying , plus risks outlined below, I would want to see these properties going at least 75% of market or lower to motivate me to buy one. I wonder if any were priced that low. Anybody?

THERE IS NO MARKET PRICE for these properties. The owners are not willing to sell for price the public is willing to pay (both inside and outside the auction--otherwise they would not have been at the auction in the first place)....AND...the buyers are not willing to pay the amount the seller is asking for these properties. (The closest the buyer came to the actual current market price of their property is the highest bid he got at the auction.)

The buyers can now add any costs they incurred for the auction to the carrying costs of the properties and continue to hold out until someone blinks. With inventories raising in Florida (and across the nation) on a daily basis (we've run out of bigger fools?), and carrying costs mounting daily for investulators, my money is on the sellers being the first to blink (or ride the slippery slope down to unprofitability like their stock market brethren before them did during the dot.com bust). In a stagnant market, every day that passes means carrying costs in the form of taxes, insurance and interest eat away at the profit.

A vacation/second home is certainly not a "must buy now" purchase. I think buyers who are toying with the idea of purchasing in Florida are quite willing to hold out until after the hurricane season ends--or until they get the price "they" are willing to pay.

 

[Jellyfish]

It sounds like the "buyers" who showed up were hoping for prices of desperation, not the going list price or a small reduction, thereby making them un-qualified in my terms, aka tire kickers or sight-seeers.

SJ- I agree with most of your opines on this board, but have to cry out here.
What the heck is a "fair" price - is it 90% of 2005's inflated value so an overextended investor can bail out with a profit? Smart buyers will wait and get as close to a desperation price as possible. If in that process they never buy and miss the boat, they lose. Over the past 3-5 years it's been all seller's market, now it's a buyers market. A small reduction over an inflated, "aspiration" price is no bargain. On the other side of the coin, list price may be a relative bargain if listed aggressively.

In my experience, anyone showing up at an auction (unless it's Sothebys) is looking for a smokin' deal....

 

[Smiling JOe]

The poor results at the auction may just reflect current market conditions. The mindset of many buyers now is "either take my low offer or I walk and wait".

Perhaps the other possible reason for lack of any sales at the auction (maybe only two sales of 21), is that the weather was so nice and warm for a change, that all of the real buyers were enjoying the beach.