Article: In Florida, New Condos On The Block

The New York Times today featured an article about Florida condos being sold in auctions. Earlier this month, I mentioned an article that spoke of online auctions for Florida property; the NY Times instead talks about the more traditional type of auction.

With new condo developments struggling and prices falling fast, developers are often opting for this method of selling as a quick way of offloading large numbers of their apartments, in some cases even trying to sell all units available. Each condo has a minimum price set (which it must reach, otherwise it will not be sold) and bids are then taken on and above that price.

The article gives the example of a recent auction for 33 units at The Edge, a 307-unit development in West Palm Beach. Minimum bids for the various different apartments ranged from $95,000 to $225,000, and all attendees were required to bring a $5,000 cashier's cheque or money order. Those apartments that sold typically went for about 20% higher than their set minimum price.

Also mentioned is a previous auction for The Landmark in Palm Beach Gardens. In that instance, although the auction was well attended, ALL units failed to sell as not even one minimum bid was reached. Steve Good, of Sheldon Good & Company who put on the auction, said:

"The marketplace basically rejected the minimum bid. Prices have dropped so far so fast that in many cases, particularly where we're representing developers, the properties might not be worth more that the mortgages.

With the plummeting economy, there's a real open question in terms of what real estate is worth today."

Article: In Florida, New Condos on the Block (28th November 2008, The New York Times)