Monday, December 15, 2008
Economy Why Pay More?
Posted by Dominic Holden on Mon, Dec 15, 2008 at 11:11 AM
They were auctioning condos for a song on Saturday and I wrote a post about it because we don’t have a history of condo auctions in Seattle but we had one last month and there will be more next year and that is news. But I didn’t write about the psychology of the auction. Auctions have used these techniques, no doubt, since women were held for marriage in Babylon.
The condo market in Seattle is desperate, one gathers, because I first saw the auction of 15 units of the Press Condos advertised a few weeks ago on a giant yellow sign that was nailed to a tree on the north end of Broadway. It was. Nailed to a tree.
In a wood-paneled room of the Grand Hyatt, people had claimed every chair when I arrived and the throngs kept coming. We were instructed to arrive no later than 11:00 a.m., but the auction didn’t actually start until noon, we found out. The only pastime were watching a slide show of granite counter tops and drinking from a wall of Pepsi bottles in the back. The auction company, Beverly Hills-based Kennedy Wilson, had known hundreds of people would attend—everyone pre-registered—but the staff had set out only 160 chairs. Packed shoulder to shoulder with young professionals and baby boomers and real-estate agents, we all thought, “A lot of people must really want these condos.”
At noon, with everyone infused with sugar and caffeine, an auctioneer, in a blue blazer and red tie and beige slacks, spoke in a reassuringly slow cadence. The bidding started at about half the conds' listed market price. Each time one of the 15 condos sold, the auctioneer would boom the word “CONGRATULATIONS!” And people (plants) in the audience, would clap for the lucky, lucky, lucky buyer. Then the auctioneer’s tone would shift to warn that fewer condos were left on the list. And everyone psychically chanted: “The condos are disappearing! I want to be lucky! I must exhaust my credit!”
But those pressures are not enough to make people spend beyond their means.
Two floor men have the sole task of making you believe their survival depends on your next bid. They are dressed like the auctioneer; their hair is rich with product and comb lines through their stiff hair lock together over their necks. The moment your auction card twitches, their eyes snap to yours. If you raise your auction card, or nod yes, or just approvingly blink—they yell “HUP!” and the auctioneer increases the bidding. If you stop bidding, a floor man will kneel before you with the gaze of a puppy dog that is needs a walk. Everyone I spoke to before the auction said they would not bid above $300,000; however, not a single unit sold for less.
What the hell does this sentence mean?
Is it safe to say it doesn't speak well for the prudence of auction buyers that none you spoke to stuck to their budgets? That they were swayed by the hype in the room to revise their fundamental opinion of the units' value? What will folks this smart do when the value drops below what they've just gotten a mortgage for on their self-evidently unsellable unit?
I'd suggest holding an auction!
IN REAL TERMS, SOME OF THOSE AUCTION CONDOS WERE WELL BELOW MARKET AND FOR THE BUYERS, A DECENT DEAL
SIGNED, FARM BOY WHO HATES TO RENT
I think you should go to a foreclosure auction or s police seizure auction and report back. Those kind of auctions sound interesting too.
Think about it ...
1. Dominic, you should look into the auctioning of the Domaine Condo project ($zillions) on the courthouse steps. That would be interesting to hear about. From the DJC:
"KeyBank has scheduled a trustee's sale on the recently completed 91-unit Domaine condo project in the Lake Union area because the owner, a limited liability company of Intracorp Seattle, is in default on a construction loan for the project."
"Domaine will be offered for public auction to the highest bidder on Feb. 6, 2009, at 9:30 a.m. at the King County Administration Building in Seattle, according to the Notice of Trustee's Sale filed with the county Recorder's Office."
2. Those fucking bastards also nailed a sign to a tree along Olive Way. Is this illegal? Who can we complain to? :(
Like I said, this is a $zillion failure!!
As for those victimized "winners", wonder what the folks down the hall who paid full price at the top of the market think?
Save it. These people got very good deals. Across the board.
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