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Sunday, October 12th, 2008 at 1:39 PM

Yesterday’s Auction Results

There were a couple of auctions scheduled yesterday.

The 14 brand new houses in Escondido were a hit, according to the sales office today.  The original builder thought he’d be able sell the 2,900sf to 4,049sf houses for $900,000 to $1,100,000, but he ended up bailing out and another investor took over to finish the construction.  He miscalculated too, and is now figuring he is going to lose around $700,000 on the project.

Yesterday they sold 12 of the 14, priced from $495,000 to $575,000, with one loss-leader at $385,000.  The salesperson today said that those were the minimum bids, but wouldn’t reveal if the final prices were bid up.

They must be feeling pretty good though, they raised the price on the two remaining for sale by $19,000 each.

Here’s the link:

http://www.bidkw.com/properties/1890

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The Mission Beach condos didn’t fare nearly as well – here is Jakob’s review that he left at sdlookup:

“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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Posted on Sunday, October 12th, 2008 at 1:39 PM in Auctions | 13 Comments » | Print Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 13 Responses

  1. 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.”

    Ouch! Its gotta hurt getting smacked in the face by reality…

    At least they were doing everything correctly with the auction marketing. Too bad college students can’t afford million dollar beach front condos.

    shadash | October 12th, 2008 at 2:22 pm

  2. “They had a dozen escrow officers waiting to ink deals.”

    hehehe

    But seriously folks, the original asking prices can be so far out of wack, that comparing the opening bids to them does not mean “bargain”.

    Unless auction price = bargain price, why bother? Especially if you have to pay the 5% kicker on top of that.

    Jakob – Did they advertise the opening bods prior to the auction (meaning, at least a few weeks prior)? Maybe that would be a better way to go about it, since no one will show up unless the opening bids are attractive.

    Smithers | October 12th, 2008 at 2:40 pm

  3. Another Nelson Muntz moment.

    People who can honestly afford $2m beachfront condos are not going to pay $2m.

    Rob Dawg | October 12th, 2008 at 2:46 pm

  4. Smithers, yep it was fairly well advertised. On all the buildings and a half dozen billboards around PB/MB. They listed all the opening bids ahead of time but noted that there were undisclosed reserves on some of the properties. That may have kept some people home. I don’t really fault the auction company. It was a well-run operation. They couldn’t control the prices.

    At the auction it was mentioned that the lenders (a different one for each building) approved the opening bids and reserve prices. They may already be in short-sale territory! I wonder what happens now? And what about the 4 or so new buildings OPP has under construction along the walk? It’s hard to see how their lenders will get paid back.

    Jakob | October 12th, 2008 at 4:58 pm

  5. “People who can honestly afford $2m beachfront condos are not going to pay $2m.”

    Pretty much sums up this entire mess. When someone else was paying for it, who cared how much it cost ….

    Smithers | October 12th, 2008 at 5:52 pm

  6. It is amazing to me how people refuse to believe “the market” sets the price. If you want to sell it now, the market price is what someone will pay for it now. If you want to wait and see, then you wait and see what someone offers you.

    You all probably know the mantra, “The first offer is usually the best offer.” Like many examples Jim has shown before, I predict that all the units that didn’t reach minimum (or that might be under the reserve price) will sell, in the end, for much less than what the minimum was set at (or in the case of the reserve, much less than has already been offered).

    “Market price” is not “What I need to get out of it.” They are going to be so sorry…

    shoppingaround | October 12th, 2008 at 6:45 pm

  7. Maybe we will see Paulson visiting these new oceanfront condos … when he is forced to purchase them.

    daveg | October 12th, 2008 at 8:16 pm

  8. Does anyone do the math on these things? $495,000 for a 340sq.ft. condo is a whopping $1455/sq.ft.!!! That’s Manhattan-style pricing. I don’t know if that new owner will EVER make his/her money back on that purchase.

    -Erica

    Erica Douglass | October 12th, 2008 at 9:07 pm

  9. I was shocked at some of the prices as well, Erica.

    “Another Nelson Muntz moment.”

    That was exactly the same thought I had at the end of the post, too. Haw haw!

    Kwaping | October 13th, 2008 at 8:55 am

  10. People are still living in fantasyland thinking that they can still create a frenzy.

    Todd | October 13th, 2008 at 9:52 am

  11. web site for the sale.

    auctionmissionbeach.com

    It lists the sale price and the minimum bid.

    worm | October 13th, 2008 at 10:16 am

  12. You would think the people at the auction would know that their were minimum bids. Why would 24 people waste their time and get $5,000 checks. When they were not going to bid minimum. I guess these people would have bid if other people had bid?????????????

    worm | October 13th, 2008 at 10:34 am

  13. Jim,

    Is there a blog or other aggregator somewhere of all the auction houses and upcoming auctions for SD area properties?

    Jbirdfunk | October 14th, 2008 at 9:54 pm

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