Two Other 'Auctions'

Posted by Dave Fratello on Wednesday, November 14th, 2012 at 6:28pm.

Here's hoping you enjoyed a look at a true auction, the one they just did in East MB.

There are 2 other recent sales which were effectively auctions – bidding wars, if you will. No yellow bidding placards here, just a swarm of offers and some kind of "process" to sort them all out in favor of the biggest and best.

512 4th (4br/2ba, 1920 sq. ft.) is a major fixer or (most likely) lot sale in the South End, adjacent to – but not on – one of the area's treasured walkstreets.

It came out in late October asking $1.369m.

That was an eminently sensible price for a non-walkstreet property. The obvious comp was 521 2nd, a house in superior (though dated) condition, which sold in May for $1.370m.

Dave guided clients to success in a bidding war for 521 2nd without seeing things get out of hand. But May was a long, long time ago in local real estate, and the bidding for 512 4th was not going to be restrained.

On 4th, the first few offers were in within days, before the first open houses. More than a dozen bidders came to the table.

The top dog paid $1.625m for 512 4th, in a sale that closed last week. It was one of those clear-the-field, all-cash offers; there was no second round of bidding.

So that's an overbid of $256k and a step up of $255k (+19%) over 521 2nd St., the seemingly on-point comp.

Only part of that 19% can be accounted for by the walkstreet adjacency factor. Knowing you can quickly trot over to the South End's joyful "playborhood" just across Ingleside is worth something.

But the rest of that 19% is just what's in the air these days – the crazy winds that sing "must have" as they whistle by.

2301 John (4br/3ba, 2600 sq. ft.) has not closed yet, but when it does, we expect an even higher markup over asking.

We reported here early on that, "[r]umors are rumbling that this will once again be multiple+multiple offers." (See "Lock and Load, Again.")

Multiple+multiple. Yeah, really. We hear 15 bidders came in.

The start price of $1.519m was absolutely wiped out in the process.

We gamed this one out for clients who were considering bidding. Given a few recent sales in the immediate neighborhood, and some plus factors on this house (the larger corner lot and good location), we foresaw this one selling in the $1.725m-$1.775m range. That was too rich for our buyers, who moved on. We've spoken to agents who brought clients to the party with bids right in that range, however.

What we didn't foresee was a sale price at 2301 John scratching at $1.9m. After all, the place needs some updates, nice as it is.

The number we've heard from multiple sources – though the sale hasn't closed yet – is $1.880m.

Virtually anyone who repeats that number is simultaneously shaking their head, dropping their jaw and just looking like they're thinking "this can't be true, wow." 

1820 Palm: $1.900m
Assuming that's how 2301 John wraps up, that would be a cool 24% jump from the start price (+$361k). You basically see it settling out at the same level as a nearby home, comparably sized, that had all the work done already: That'd be 1820 Palm (5br/3ba, 2450 sq. ft.), which sold in late August for $1.900m after trying, ambitiously, at $2.149m.

Or look to another block of Palm, to a listing that came out at the very same time as 2301 John: 2400 Palm (4br/5ba, 3100 sq. ft.) is larger and newer (2004), a warm modern with a fun layout. It needs nothing, it's move-in ready. It just closed for $2.050m. After doing some work on 2301 John, the new owners would seem likely to be into that property for more than the new owners of 2400 Palm. (FWIW Palm is up as a rental at $8k/mo.)

Maybe it's just a factor of John Street. This street has quite the history this year.

There were 20 offers for 1805 John St. way-back-when (March 2012), a unique case with builders and owner-users competing against each other for a prime lot. The 5065 sq. ft. lot went for $1.352m, and that wasn't even the highest bid.

Several offers flowed in for 1812 John (4br/2ba, 1750 sq. ft.), twice – the property came back to market after a failed escrow. (We never got a reliable count of offers.) The structure needs some help but probably won't be razed. That one fetched $1.330m.

But nearly $1.9m 2301 John – it's hard to say which John sale is the biggest surprise of the year.
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