Arriving shortly after 11 am, I was later than most as the seats were filling up and the line was growing longer at the registration table. Bidders were checking in and the day was perfect for an auction, Island Reserve Condos were ripe for the picking and the deals were sure to be sweet.
Having been to plenty of auctions, I was skeptical of this one as I had witnessed first hand the developer shutting the doors when the crowd wasn’t bidding what he thought they were worth. Everyone I was talking to said the sweet spot for them would have to be around $50 to $75 per square foot, or they wouldn’t be interested in purchasing. Out of the responses we had from our feature on The Beach Show, we had a half dozen or so that were considering registering, but decided against it. They didn’t think the developer or bank would let them go that cheap. Well, they were wrong. They sold 125 condos, most falling in the $66 to $75 per square foot range.
*Note: the bold italicized excerpts are from the live updates I was doing onsite Saturday. I figured it best to start with those, then add commentary.
1138: a little more than half the seats are filled right now with right around 200 registered bidders
If you walk back in time with me, Seahaven garnered 54 registered bidders, Ocean Reef brought 126 and Palazzo brought 126 registered bidders also. 200 registered bidders is a phenomenal sign that buyers are coming back in the market, but they are coming for blood. If the deal isn’t super-sweet, then they move on. The crowd was anticipating rock-bottom prices, they showed up, and that’s what they got. Estimations pinned over 600 in attendance. The chairs were filling up quick.
1223: 3 bedroom started at 150k sold for 214k
One of the most important things I believe the auction company did to keep the audience’s attention was keep the starting prices low. By starting with realistic numbers, they kept the audience from becoming disinterested and leaving. This also kept the crowd hyped that they may be into something cheap, real cheap. All of the three bedroom condos were 1,761 square feet and they started the bidding process at a very modest $150,000. They quickly had bites and worked their way up from there. The first bidders were fighting for choice. If they won, they could have their pick of any of the 3 bedroom condos, in the whole development. With 52 to pick from, this brought a higher price than the later 3 bedroom condo bidding. The first set of bidding finished off at $214,000. After the buyer’s premium of 10%, the buyer paid $235,000 or $133.75. I was actually surprised to see these kind of numbers being pulled. When asked if anyone else wanted in at that price, there were no takers, back to the bidding!
1231: lady right behind me just bought 3 bedroom 3-108 for 200k. 1761 square feet. 124/ foot after buyers premium. Next bidding starting at 160k for 3 bedroom.
The next set of bidding started lower and obviously brought a lower price. This continued to be the theme, as the afternoon temperatures went up, the prices began to progressively decrease. I suppose the winning bidders of these earlier auctions can justify their purchase by getting first choice, but I think I would have waited a bit to see how it would pan out.
1236: just sold unit 6-111, 3 bedroom for 172k – before premium.
Just 13 minutes after the 3 bedrooms were selling for $133 per square foot, the audience was only willing to pay $107 per square foot after buyer’s premium. That’s $2 off per minute. Of course, it should be noted at this point that after prices were determined here, the auctioneers would ask if anyone else wanted to buy at this price, and they would sell them until the demand went away. The lower the price fell, the more the demand grew after each set of bidding. I don’t have a full list of what sold Saturday yet.
1239: just sold 3 bedroom for 160k unit # 6-314. All three bedroom condos are 1761 square feet. 99/foot after premium. Starting to sell 2 bedroom condos
3 minutes later the prices dropped another $8 per foot. At this point they had sold several three bedroom condos, quite possibly the majority, but I lost track very early on, so I decided to stick to the live updates.
1245: first 2 bedroom sold for 125k. All 2 bedrooms are 1325 sf. This sold for 103/foot after buyers premium. Unit # 6-103. Also 5-101 sold for 117k.
When the two bedroom condos started being auctioned off, the response from the crowd grew immediately. There was clearly a greater demand for this size option. The sold price per square foot seemed to pick up where the 3 bedrooms left off, coming in at $103/foot. These are beautiful 1,325 square feet 2 bedroom 2 bath condos selling for $137,499 after the buyers premium. At this point, we were 45 minutes into the auction and the prices had come down $30 a foot, I was anxious to see how the day would pan out.
1251: 2 bedroom unit number 7-301 sold for 100k before buyers premium, that’s $83/foot after premium.
The price just kept falling. A guy next to me asked if I thought he should get in on the action. I kindly advised him to wait, the prices had been continually falling. He was glad he waited.
0109: hit a sweet spot on price, a frenzy has begun. People are practically arguing over what they are getting. One guy said he’d take what was left at this price.
Roughly an hour after the auction began, the auctioneers found the tipping point. As soon as the auctioneer yelled “SOLD,” the crowd began to form at the front of the tent. I was sitting in the front row, and was practically crowded out. I quickly moved to the side as Cebo scrambled to capture the action with his camera. There was arguing, lots of it, and enough tension to make my brow break into a sweat. I was having trouble typing on my blackberry, I was getting nervous, and I wasn’t even registered to bid – but I should have been, Island Reserve is awesome, but at this price, it was phenomenal.
So, I know you are dying to know – what was the sweet spot? $77,000 for a 1,325 two bedroom condo in Island Reserve, before buyers premium. That comes up to $64 per square foot after the buyers premium. Hoards of people rushed to the front, and on more than one occasion I heard someone say they would buy the rest of what was left at that price. At this price, there’s almost no way you couldn’t cash flow it, regardless how you rented it out. If you had the money, there’s no reason why you wouldn’t be all over this.
0124: so much of a frenzy, they started the bidding again for the 2 bedrooms. Now selling the last 5 available absolute for 87k before buyers premium
They shut the selling down and took the rest back to the auction block. They were able to squeeze just a little more out of the price. They were sold out of the absolute allotment of the 2 bedroom condos within minutes with the rest selling at $95,700 after premium or $72 per square foot – again, all the two bedroom condos are 1,325 square feet.
0138: 1 bedroom unit #3-105 sold for 73k before buyers premium that’s 74/foot after buyers premium. Next bid is at 66k right now and . . . Sold for 70k. Guy’s buying 8. The one bedrooms being sold are 1071 square feet
They moved on to the one bedroom condos, and the prices stayed about the same, maintaining the mid-$70’s per square foot. There were a total of 15 available absolute, all of which were 1,071 square feet. Again, I don’t have the full list yet, but I believe all of these were sold, and quickly. For the rest of the auction, there was a consistent number of bidders standing at the front to be sure they didn’t miss out on the action.
I think the deal of the day was the one four bedroom 3,019 square foot townhome with a two car garage that sold for $200,000. That’s a townhome twice the size as my home with tons of great amenities at the new owner’s finger tips.
All-in-all, I think most of the buyers made out very good. This was a property that needed to sell at rock-bottom in order for it to happen, and the bank and developer let it go for what the market would bring. I’m sure it hurt, but they made the right choice. This is not a time to be picky, if you have a buyer, you’ve got to do everything you can to keep them, or someone else will do what they can to take them from you.
I was talking to one of the auction organizers in the beginning, asking if the bank needed to approve anything for it to close. I was told that Roebuck, the developer and the bank have been all working together from the beginning and everyone was aware that the prices were going to be low. I was told that no one would have a problem closing and each buyer was guaranteed a clean and clear title.
This was the first big auction I can remember Roebuck doing in this area since the Faircloth auction, and I think they did a stellar job. Great show.
Thirty year mortgage rates have been attempting to push through the 5% ceiling over the past few days as continued gains in the stock market have beaten up on bond prices. Jumbo rates remain frustratingly in the 6.875% range stifling any potential recovery in the high-end home sector. Government loan rates for thirty-year mortgages are now all in line with conventional rates hanging right around 5% for the past several weeks for VA, FHA and Rural Development. High-rise condo financing remains extremely difficult to obtain here in Florida though some local banks are offering in-house portfolio ARMs such as my 5/1 and 3/1 to try and help second-home buyers take advantage of the incredible deals out there right now.
My tour began in the 4,200 square foot half court basketball gymnasium with 35 foot tall vaulted ceilings overlooking the 1 acre lagoon pool. Attached to the gymnasium is a fitness center, private theater room and club game room filled with a pool table, card table, bar and a sink.
The whole resort was designed like small community with plenty of areas to spend time outside. The landscaping was a little rough, but crews are working to revamp everything by auction day.
PCBDaily 