- ECityBlues on Flickr
- 5th & Madison, left, Downtown Library, right
Condo auctions, a nascent trend in Seattle as the market slowed in 2008, continue for some new buildings that still have unsold units. Developers recently turned to auction companies to unload their stagnant stock. The latest is the 5th & Madison building, located across the street from the downtown Seattle Library, where King County tax records say 24 units remain vacant.
A California-based firm is auctioning 18 of them at bids starting at $195,000—considerably less than their listed prices, which reach a million dollars. But while the auctioneers ballyhoo the low starting prices as an indicator of huge saving, if past auctions serve to predict, most units will end up going to a top bidder who shells out much more. At one recent auction, the units sold for about 80 percent of their listing price—which is still a good deal. Most of the units at 5th & Madison have a taxable value of $400,000 to $600,000, according to King County tax records, which is likely a bit more than they will sell for.
The events are quite the spectacle. From my description of one in 2008: “If a bidder raised his or her auction card, or nodded yes, or so much as blinked in a way that seemed approving, the floor men yelled, ‘HUP!’ and the auctioneer would increase the bidding. If the crowd stopped bidding, the floor men would gaze pathetically for another bid, like puppies begging for a walk.”
If you want to bid on a condo, you’ve got to pre-register and then show up at 1:00 p.m. on March 28 at the Grand Hyatt Seattle.
real estate is only worth what people think it’s worth.
you can buy a 4 br 3 story house in some cities in the US for $50,000 …
@1 Yeah, but who wants to live in Cleveland or Detroit?
Um, that describes pretty much anything there’s a market for, you know.
@2 – um, even in this state …
@4: Yeah, but who wants to live in Chehalis or Aberdeen?
for instance, this beauty is just as nice as any $500K condo in seattle:
http://www.redfin.com/WA/Chehalis/998-NW…
or if you don’t like chehalis or aberdeen, tacoma should work just fine:
http://www.redfin.com/WA/Tacoma/3611-E-P…
it’s only worth what we think it’s worth.
@5 – but Chehalis is the winter wonderland escape for our state (at least that’s what the TV keeps telling me) …
My brother, who lives in NYC, and makes a lot more than I do, lives in an apartment the size of my KITCHEN. Supposedly, it’s worth more than my entire townhouse …
Is the idea that the location of a property would reasonably affect its value really a difficult concept for some people?
I’m glad they lose money on these hideous monstrosities. Maybe it will stop them building them.
Please elaborate: “but Chehalis is the winter wonderland escape for our state”
Chehalis is along I-5 at elevation 270 feet.
$50k won’t get you a condo in Colfax. Scrape up another 50g’s and we’re maybe talkin’ a 2 bedroom house in Rosalia.
@10 – dude, it’s outside Seattle, so obviously it’s filled with gun-toting crazies.
@12:
Well, considering that my relatives who live around there pretty much fit that description, I’d have to go along with your assessment.
And let us not forget the fact that, in many of these auction situations, that “top bidder” is generally a bank that the developer may owe $$ to, or that has interest in surrounding properties. They buy up the existing stock at more than what most people would be willing to pay in order to keep their “value” at close to market-rate, as well as to maintain that rate for the other properties in the vicinity.
Because, if they actually LET people buy condos at 50% of their stated value, well then, THAT would become their actual value, and that would have the effect of devaluing the entire property as well as drag down rates for adjacent properties, which means the developer wouldn’t be able to charge as much for future projects, and the bank in turn wouldn’t make as much profit on loaning them the $$ to build them.
If you’re curious, here’s some of the results from the auction. http://www.seattlecondoreview.com/2010/0…
In case you’re curious, here’s how it panned out http://www.seattlecondoreview.com/2010/0…