Auction Season

By Helen Hill

There was spirited bidding for some units in the gated village of Wilton Station sold at auction. Sale prices came in at a little over half the previous asking prices.

As if we didn’t know

The news isn’t very good these days. A new report from Condo Vultures LLC shows a further decline for February, compared to January, of 1 percent in the asking price on South Florida condominiums as the number of distressed units available for sale increased slightly. The typical condominium in the Vultures Database is now down an average $172,601.  

Individual markets showing the greatest decline in the period were North Bay Village, down 30 percent in February, and Fisher Island, with a drop of 18 percent. Other drops in month-over-month pricing were: Palm Beach, 32 percent; Miami Shores, 30 percent; North Miami Beach and Hollywood, 28 percent; Fort Lauderdale, 27 percent; and Coconut Grove, 26 percent.

However, a few markets experienced a leveling-off in discounts in February: Aventura, 28 percent; Key Biscayne, 24 percent; Pompano Beach, 25 percent; Wilton Manors, 29 percent; and West Palm Beach, 25 percent.

“We are nowhere near being able to call the bottom, but obviously a leveling-off in discounts in nearly one-third of the South Florida submarkets in the Vultures Database is something that needs to be monitored,” said Peter Zalewski, a principal with Condo Vultures LLC.

Auction trend

Real estate auctions go back at least to ancient Greece and have been a fixture of the American real estate market since the 1600s, according to www.auctioneers.org.

But there’s a difference in concept here compared to elsewhere in the world where auctions are an accepted means of selling property. In Australia, for example, sellers put their single-family homes up for auction as standard procedure. And in Britain, weekly investor auctions have been around for decades.

In the United States, real estate auctions are usually assumed to be a way of unloading distressed properties, especially foreclosures; the papers are full of ads for “must be sold” homes. In fact, unless the sales are absolute (i.e. no reserve price so highest bidder wins), the odds of picking up “10 cents on the dollar” bargains are not that favorable. But the process is intriguing and often fun. Prospective buyers who have done their homework, carefully checking out the property and legal status in advance, may get a deal, if not a steal!

This weekend, Hudson & Marshall, America's largest foreclosure auction firm, will auction more than 500 foreclosed or bank-owned homes throughout Florida. About 200 South Florida homes will be auctioned on Saturday, April 12, at the Harbor Beach Marriott, Fort Lauderdale. The company says all homes are sold "as is" but come with guaranteed title insurance paid by the sellers and free of back taxes and liens. See details and property listings at www.hudsonandmarshall.com or call 866-539-4172.

On Sunday, April 13, USHomeAuction.com will offer foreclosed homes in an auction at the Miami Beach Convention Center. Info at www.ushomeauction.com; for catalog, call 800-575-4466.

Now for something different

A real estate auction at Bahia Mar in Fort Lauderdale was far different from your usual lot of sad properties. This high-end affair of mainly million-dollar homes, held in late March, was a joint effort of Daniel DeCaro Real Estate Auctions, Inc., Sol, Sotheby’s International Realty and Nestler Poletto. The auction functioned as a marketing tool to identify buyers, shorten the sales cycle and generate publicity for featured properties.

Two absolute lots brought considerable buyer interest and sold after spirited bidding. The year-old luxury development of Wilton Station in Wilton Manors, with condos and brownstones previously priced in the high $400s, has recently been plagued by slow sales and slower resales. At auction, 11 units sold without reserve for prices ranging from the high $200s and mid-$300s to one in the $400s, altogether coming in at an average 50 to 60 percent of original asking prices. Some units were sold prior to the auction and others are attracting buyers post-auction.

Although many units failed to sell, or even open near the reserve, DeCaro Real Estate Auctions founder and owner Daniel DeCaro is optimistic. “It was a challenging day for me and sellers, but I think that overall the auction was very good,” he said. “The auction offered great exposure to buyers, and we had a mild success selling two Fort Lauderdale homes above $10 million. They were the first to sell in that price bracket in the last two years.”

Miami-Dade properties included two penthouses at Ten Museum Park in downtown Miami, not previously offered for sale. A starting bid of $1 million failed to reach the opening reserve for a three-story, 2,500-square-foot unit with 1,800-square-foot terrace. Nor were there bidders starting at $2.5 million (below reserve) for a 5,400-square-foot plus 1,800-square-foot-terrace penthouse. However, acceptable offers for the units came in after the auction.  

Fisher Island luxury units also failed to receive opening bids of $1.2 million but attracted post-auction buyers, as did 18 condo units at 3030 Aventura.

DeCaro said buyers tell you what the values are. “This proved that 2004 and 2005 prices are no longer current values, but now it’s a level playing field.”

Buzz

Federal housing laws are pretty strict on discrimination against potential buyers or tenants on the basis of race, gender or religion, but the messenger — in this case online sites such as Craigslist — cannot be blamed for posting discriminatory ads.

A recent federal appeals court ruling upheld an earlier ruling by the U.S. District Court for the Northern District of Illinois, Eastern Division, against a lawsuit accusing Craigslist of violating federal housing laws by more than 100 discriminatory ads. The federal Communications Decency Act protects sites that allow users to post unedited messages and communicate freely in forums.

 

Kudos To…

Jo-Ann Forster, a broker associate at Coldwell Banker Residential Real Estate, Coral Gables San Remo office, for being recognized as its top sales associate in Florida for closed sales volume for 2006 and 2007.

Coming Up

Thursday, April 24, 8 – 9:30 a.m. Urban Land Institute Southeast Florida/ Caribbean breakfast program on “Dollars and Sense of Sustainability.” Ed McMahon, ULI senior resident fellow for Sustainable Development and Environmental Policy, discusses how sustainability makes good business sense in the context of climate change, high energy costs and land use practices. Hilton Fort Lauderdale Airport Hotel, 1870 Griffin Road, Dania Beach. Fee. Register by phone, 1-800-321-5011; reference event #8135-0809. Info. www.seflorida.uli.org

Please send news items on Miami-Dade real estate to hhill@miamisunpost.com.

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