This turned out to be the most “interesting” auction to date in Orlando. A complete contrast from downtown Solaire last month, and nothing like the Lake Mary auction of last year, the Tradewinds auction in MetroWest finally solidified the notion that right now, your average home buyer is both terrified – and somewhat clueless.
A pre-auction show of hands revealed that most attendees had never attended a real estate auction before; most clearly came without a Realtor and few had done their “homework” to any meaningful degree.
I would guess that about 350 people turned out for the auction. A good handful were no doubt Tradewinds owners – watching eagerly from the sidelines, waiting to see just how hard they were about to get screwed. Pretty hard as it turned out.
The “high bidder’s choice” auction began with the 2/2 floor plans, but despite everything, the auctioneer couldn’t raise more than $105k for any of them, a very disappointing start for the developer. These were the first ‘steals’ of the day – with a couple right on the lake. I could almost sense the collective shock under the marquee from those in the business – and it all went downhill from there.
The 1/1’s were next under the gavel and quickly bottomed out at $65k. A 10% “buyers premium” was then added to each high bid price for the auction company (arguably, the biggest rip-off of the day.)
Although touted as a “100 Absolute Auction” it quickly became clear that the developers would not allow pricing to fall below a certain level (can anyone explain that?). Once that bottom was reached ($85k/$65k) all potential buyers were allowed to jump in and take a condo at that price before the auction was shut down. All in all, about 40 of over 200 hundred available condos were actually sold.
This bizarre state of affairs seemed to leave nobody really content, and was the most telling snapshot to date of the confusion in the condo market right now. Clearly, this was a less than perfect result for the developers both in terms of revenue raised and units sold, but what really shocked most of us was the fact that more buyers still don’t recognize a good deal when they see one. And while there is still a huge disconnect between the expectations of both buyers and sellers – in my view, the buyers were the ones who got it wrong yesterday. $85k for a 2-bedroom, 1000 square foot condo with high ceilings on one of the most beautiful lakes in MetroWest — and you don’t want it??
I over heard a few comments from folk who were clearly not planning to jump in until the bidding dropped to $40k. Guys, that was never going to happen. This was a marketing event, not a liquidation bloodbath. I’ll be the first to admit that prices in many, many cases are still to high but if you were looking for Dollar Store or Craig’s List pricing yesterday you came to the wrong event. Yes, it IS a buyer’s market — it’s NOT a housing-revenge, Black-Friday-style, free-for-all grab-and-go (yet). And if you think the market will see these condos come any cheaper (other than short-sales /foreclosures) then I’m going to stick my neck out and call you wrong. These were without any doubt the lowest prices seen for a product like this since the bubble burst, and this was the first Orlando condo auction I’ve seen where real ‘auction deals’ transpired – if only a few. Congrats to those that got in. You got it right.
Ok, now tell me I’m wrong and beat me up.