Revisiting the MB/HB Auction

Posted by Dave Fratello on Thursday, July 15th, 2010 at 4:45pm.

For a recent column in the Daily Breeze, MBC's author covered an auction of 18 condos in Rolling Hills Estates. (One unit's interior is pictured here.)

Short story: They broke ground in late 2006 (oops!) on some experimental luxury condos, and the project flopped. (The column is online here and also here, in its print layout with photos.)

The auction occurred this past Sunday, and the auction company is still sorting through the bids to try to seal up all the deals. What we know for now is that they did get bids on all 18 condos.

Meantime, this auction reminded us of the once-ballyhooed MB/Hermosa new home auction, which had very different results.

You may recall this one, and if you do, bravo – your memory's better than you thought.

It was November 2008, and 5 separate "new" homes (they'd all been stuck on the market for quite a while) were put up for one big auction, with the emcee and crowds touring around from property to property as efforts were made to unload each one.

Alas, not a single one of the homes sold at auction.

In the immediate wake, there was an upbeat buzz about interested parties who might be working out side deals, but that apparent action petered out, and each home returned to the market. (See "Forget 'Qualified' – Auctions Failed.")

Gradually each failed speckie did find a buyer, though. We always meant to wrap this up, so better late than never. Let's review:
  • 2509 Palm (5br/4ba, 3200 sq. ft.) logged more than 550 DOM from April 2007 forward, with a start at $2.449m. Its twin, one block over at 2509 Walnut, hit the market at the same price in July 2007. Walnut made a deal for $2.025m, but Palm went to auction at $1.499m.
Even that come-on price didn't work. Palm foreclosed instead. The buyer who grabbed it put it back on the market and, lo and behold, sold it in June 2009 for $1.675m, a surprising outcome.
  • 1211 11th (5br/5ba, 3325 sq. ft.) (pictured) hit the market in Aug. 2007 for $2.149m, logged 400+ DOM and came to auction at $1.450m. No deal there, it re-listed at $1.799m (really? yes!) and sold in May 2009 for $1.425m.
  • 1405 Faymont (5br/5ba, 3550 sq. ft.) hit the market at $2.095m in 2007 also, rolling over to the auction at $1.399m. No deal, but in January 2009 it closed for $1.350m, going to a buyer who first learned of it at the auction, but didn't bid then.
  • Two next-door newbies in Hermosa Valley were part of the auction also, 540 21st (pictured) and 544 21st. Both hit the market in Summer 2007 at $2.499m. 540 went to auction at $1.649m and 544 at $1.669m.
Both Hermosa homes later closed above their auction prices in June 2009, 540 at $1.750m and 544 at $1.725m.
If you were keeping score there, it's pretty amazing to see that 3 of the 5 auction homes sold above their auction start prices – one after a thorough foreclosure cleaning. Granted, we don't know the private "reserve" prices slapped on each property, which were probably higher – "reserves" didn't matter much when bidders basically skipped the process.

Of course, there was another auction held in town late last year that was a success. That was a probate case on what MBC called a "grim, destroyed house" at 1801 Elm. (See "Probate Auction Ends at $805k" and "Probate Auction Home Closes.")

The closed price there was closely in line with the market opinions expressed by MBC readers in our pricing poll on the property, which actually launched at the come-hither price of $399k. (See "Poll Results: 1801 Elm.")

We're not aware of any auctions upcoming in MB, but you never know, do you?
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