UrbanTurf, a DC area real estate publication, was on hand this past Sunday for the auction of remaining condos at The Ashmore at Germantown.  It seems the auction was not as successful as the developer, Fairfield Residential headquartered in Texas, had hoped with a reported 18 units having been sold out of the 40+ that remained available.  Perhaps the results will be better this Sunday when The Mercer in Reston holds its auction.  The Mercer is a newly constructed high-rise condominium building with one- and two-bedroom homes with starting bids of $155,000.  Unlike the Ashmore auction, The Mercer auction will not have any buyer's premium.  Click here for more information.

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Bidding on Property: The Scene at a Condo Auction

November 19, 2008 | by Mark Wellborn, UrbanTurf

(This is the second of two articles we have written that focus on condo auctions. The first article was published last Friday.)

Last Sunday, about 150 people showed up at the Hilton in Rockville to try and scoop up a brand new condo (or two) at a heavy discount. The Ashmore in Germantown was auctioning off a good portion of their remaining inventory well below their original list prices that ranged from $322,000 to $385,000. The prospect of getting an amazing deal on a new condo attracted both would-be homeowners and amateur real estate investors.

When the three-bedroom condos were put up for auction around noon, the opening bid rocketed from $150,000 to $200,000 in a matter of seconds, and all indications were that this event was going to be a buying frenzy. However, after the first condo went for $215,000, the next dropped to $205,000 and the next to $194,500.

As the final bids began to hover around $190,000, the developer, Fairfield Residential, pulled the rest of the three-bedroom units out of the auction. But before doing that they offered a “step-up” sale for any of the remaining units, which meant that a buyer could purchase one at the price of the last winning bid ($197,000). There were no takers.

“The seller could not have been pleased with how the three-bedrooms sold,” area broker James Edwards of Edwards Realty told UrbanTurf as he looked on.

It is important to understand that the bidders were not bidding on a specific unit at this auction, but rather on the ability to choose from the available pool of remaining units. The resulting dynamic was that the winning bid fell a little bit as the supply dwindled.

Source: UrbanTurf. View Article.

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