NYC Auction: Is that the best they can do?

agreed.

The 325 Fifth Ave asking price is absurd! Who would pay above $1k per square foot to live in an N-th tier residential section of the city? The descriptions are priceless, too - more like justifications than descriptions. "No really - this is a good price, seriously!!"

The chelsea prices don't seem outrageous (and seem to be significant discounts to what the apartments were originally sold for).

I thought the original article mentioned there were around 10 apartments they had lined up to sell. Anyone know why only 3 to start?

What the apts. sold for originally is irrelevant, bubbliciuos. The question is whether, 650 psf in a new dev in Chelsea is good for today or not. As to 10 apts. going to be auctioned, I guess they'll add bit by bit in the next few days. The 3rd one was only added today. On the other hand, I seem to remember that they announced they were going to auction 10 per day as soon as they got rolling, that would mean 10 on May 17th, another 10 on the 18th, so on and so forth. Let's wait and see, and also see how many receive any bids. 325 Fifth is a great candidate not to.

325 Fifth Ave. is no bargain! Why bother to participate in an auction where you have nothing to gain?

i cant tell what a bargain is any more. 29E @ 325 is listed at $1,350,000 so it looks like 33E is offered by bidonthecity almost 20% lower.

suggestion re finding a bargain: check out comparable rentals which are widely available in all sizes, shapes and prices. if the all in after tax monthlies with a 20% down payment for the purchase aren't less than the rental...run away as fast as you can. the question is how much less do they have to be for you to feel comfortable with the risk of loosing on the principal. this is more complex based on your likely time horizon on staying, etc. but, if calculation #1 doesn't work, don't bother.

7867, 33E at 325 Fifth is offered at the same price they bought it for in 2007. So it's at least 20% overpriced. Any other information is irrelevant. Think a bit.

Trompiloco, i know the building a little. You are correct - people were closing in 2007, but all units were pre-sold within just few days in 2005

I am bidding on 325....

> 325 Fifth Ave. is no bargain! Why bother to participate in an auction where you have nothing to gain?

Its a marketing ploy.

But, likely waaaaay too little, too late.

7867, 2005 is still delusional as starting price for an auction. Deals are now being done at 2004 prices, and treading down fast.

hellosellers, be my guest

Trompiloco, its a general statement. What deals are being done? Are you a broker? Find me one deal at 2004 price. On bidonthecity i can see real numbers and they are low

7867, just go to the "market movements with comps" threads. W81st, patient09, happyrenter (and many others) have done that work for us. there's quite a few.

7867, if you want to bid, go ahead. My suspicion, however, would be that you want others to bid.

BTW a fourth property has been added in the website, but nothing to see there, except unintentionally funny things such, as for example the fact that the owners of that glorified 440 sqft apt. on W 51st had initially thought of setting the MINIMUM BID at 450K, meaning over 1000 psf, and then decided to lower it to an astoundingly levelheaded 399K. But they forgot to change the text of their ad. In sum, all this reminds me of a post by stevehjx, I think, about a month ago, that showed how the people organizing an auction in Long Island or Westchester we're crowing it had been a success because they had sold 2 out of 10 properties. This is going in the same direction, at best.

That 555 building is getting some bad press from these postings. What's the deal there??

It really shows that these bidonthecity guys are totally amateur and new to the auction business.
I've participated to a lot of auctions since the last few years(non Re estate ones), and when auctions start at $1 or $10 or $100, there is some sort of shark frenzy behavior in the room during the bidding and most of the time, people are getting out of control & end up overpaying for the listing. Only the well prepared participant who have studied well the market price of each lot know where to stop.
When i see the starting price of these lots at bidonthecity, i guaranty you that the out of control shark frenzy behavior will not happen. First, it will be boring to assist these auctions, and second the auctioneer may just go home the tail between its leg and start their reputation with a very bad score. Cause, believe me, if, as the auctioneer, you sell only 20% of the good you are being given to sell at your auction, you suck!

A lot of these auction sites will start to spring up in the next couple of years. Will be interesting to see what websites come up with a winning strategy. Certainly if they don't create the frenzy that sledgehammer has aluded to, they will disappear.

While I don't disagree with sledgehammer or austin, I think the bidonthecity guys are not responsible for this situation, but rather the delusional sellers that have popped up for the maiden voyage of the site. I think bidonthecity gets paid regardless of the apt. selling or not (I know they charge for listing, marketing and auctioning the apts. within a 30 day period, I don't know if they also earn a commission on the sale proceeds) But yes, if things go the way they look right now, they should consider refusing listings that don't seem reasonably priced for an auction. First impressions count, so I don't know how they'll feel on May 18th.

i'm afraid it's around 2 to 3 years too early to buy anything in auctions. foreclosures might be the best way to go, but it's too early. i don't doubt there's going to be plenty of stuff available though.

This is a joke. This is one more sign -- amid innumerable signs -- that this market is still wacked, illiquid, sticky, great risk of massive downward gaps going forward (in terms of actual sales closed(. If an auction has these FLOOR prices, meaning that presumably expect more to be bid, this is just one more sign of sellers in denial.

I thought the purpose of an auction was to cut the crap, and MOVE TOWARD A PRICE AT WHICH APARTMENTS WILL ACTUALLY CLEAR. The 300k for 460 sf in Chelsea might be ok..but that is the minimum bid..and I think if the market crumbles then people will be saying, hey. what can I get for 300-350..and it might e way better than that place.

This is not comparable to the "auctions" in other cities , I would guess, at least not the kind of mark-downs seen in Miami auctions.

Also...refer to what other apartmetns listed for in the buildings is a bit of a joke. Basically irrelevant, given the seller in DE NILE syndrom.

Maybe we should consider the first few bidonthecity auctions a beta test and/or public demo of the technology and the process. The properties and prices might be a joke; but if the infrastructure works properly, the site will be ahead of the competition when serious wholesaling of shadow condo inventory begins. That's where the real money in auctions is likely to be, and substantial offerings are in the pipeline.

this process doesn't stand a chance. First they are going to try and sell co-op's as well, how is the co-op board going to review the package? Second co-op boards can take months to review a package, and what happens if they deny the winning bidder (condo's can deny as well they just have a purchase clause) Also, what happens if winning bidder doesn't deliver down payment or doesn't sign contract in 48 hours. Does the winning bidder have a mortgage contingency? If not, then that completely changes the pricing and limits the pool of buyers. This is never going to happen. NYC Real Estate is just very complicated to try a system like this. NEVER

dledven et.al.: I agree that it's hard to envision many retail buyers purchasing new homes through an auction site. If bidonthecity's business plan depends on that happening, they are likely to be disappointed.

More likely, I suspect they see sales being struck two ways: first, professional investors and the occasional daring apartment-hunter actually transacting through the auction mechanism; and second (perhaps more importantly), deals getting done offline, with the auction process serving as a data-gathering/matchmaking mechanism.

When you register to bid on a specific property, you make a fairly serious declaration of interest, even if you don't ultimately bid. I think that information - a self-selected list of pre-qualified buyers - is pretty valuable to a seller, and may well lead to sales through more traditional negotiations.

West- here is my point professional investors/private equity funds/vulture funds or big block buyers would have negotiated on these transactions before (they are always approached first or make first contact) But developers can't let the price go at those low prices, they are better off having the banks take the properties back,
If you think it is going to be a medium that is going to place buyers and sellers together, i disagree, buyers are making offers (sellers just can not and are not accepting the offers), the sellers participating in these auctions are hoping, what is actually very scary is if banks/lenders ever see the auction prices even if there is a minimum reserve and doesn't reach the point, banks/lenders can use the auction price as a point for other comps. this system can be very negative.

You know what? Fine! Let these properties go back to lenders . At some point they will have so much stress that they with work in hand with Real auctioneers to unload bulks of them. You can't hide bad assets forever, at some point , the government will impose banks to do some major cleaning.
The bidonthecity model is bullshit! Just a disguised marketing model. As a matter of facts , distressed developers could just open a sub company, call it auction whatever and try to unload their inventory this way, i don't buy it. Try to fool someone else ...

I can't recall where I read it, and if I come across it I'll post it, but I read a fascinating piece today on how lenders are continuing to provide lending to projects just because they DON'T WANT TO TAKE POSSESSION of the failed projects. They want to keep the losses, at least for now, off of their books. Taking a page out of the government's play book.

West81 is right. Data gathering and deals off-line. Almost all agencies have this model, regardless of the product. The gimmick is the right carrot in the name (auction! bidding! hurry!) while in fact they are just a regular brokers. An FSBO can and does occationally hold an auction.

Yeah. That was the purpose of the few NY apartments that have been listed on EBay, too. The broker posting on EBay was not obliged to accept the bid, so it was basically an information gathering tool on possible buyers.

Aboutready, I read the same thing on cnn.money, which makes sense in its own perverse and childish way. The evident failure of the PIPP to generate any enthusiasm shows that everybody is kicking the can a little bit farther down the road. Only problem is the can continues to grow bigger and hold more and nastier worms inside.

West 81st, when wholesale auction of shadow inventory in new devs begins, then we'll know what the city is in for. The way things are going, it's a real freakin' mystery and a ballooning problem, when that will start to happen. 2009? 2010? 2011? They just can't sell 7000 apts. at an average 1200 psf, not even close, and they can't go rental with such volume. But very few new devs have tried to solve their problems aggressively, a la Northside Piers, and even they're not being successful.

New developments know that they're going under. And they, for the most part, don't care. There's not a lot of emotion generally in development. Related Cos. may be an exception. Most companies develop as long as the banks will let them, take profits when they can, and force non-successful developments into bankruptcy to avoid losses. Pretty groovy formula, isn't it? Tell your children to grow up and become pro golfers or real estate developers.

I dont see bidonthecity advertising anywhere. what is it about?

I don't even get what "infrastructure" or business model these guys are offering that is anything special. I watched an auction on-line in Miami that worked like clock-work, very professional and crisp. There are companie that do this already anywhere needed.

Jimstreeteasy, sorry to be off topic but where did you see the online acutions for properties in Miami?

I can't find the auction site. They did 700+ in one day in Miami (and then had a similar amount going each saturday in other cities in florida and elsewhere). It was pretty cool, as I watched live online feed, and they sold properties in about 45 seconds.All the building info was online with pics. As an out of state person you could legally bid online. I had a friend who went in person.

It was called something like usrealproperyauctions or something...something generic...but very professional and now I dont see it.

I watched the auciton in Jyly or August..but they did another in the fall I think.

Hang on to your money folks, we've still got a ways to fall:

NYT
http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html?_r=1&partner=rss&emc=rss
April 22, 2009
ECONOMIC SCENE
For Housing Crisis, the End Probably Isn%u2019t Near

[...]
The glut of foreclosed homes creates a self-reinforcing cycle. Falling prices lead to more foreclosures. Foreclosures lead to an excess supply of homes for sale. The excess supply then leads to further price declines. Jan Hatzius, the chief economist at Goldman Sachs, says that the %u201Cmassive amount of excess supply%u201D means that home prices nationwide will probably fall an additional 15 percent.

This estimate hides a lot of variation, too. In Miami, Goldman forecasts, prices could drop an additional 33 percent, which is pretty amazing since they%u2019ve already fallen 50 percent from their 2006 peak.

Nor is excess supply the only reason prices still have a ways to fall. Over all nationwide, homes may not be overvalued by much. But in some cities, including New York, San Francisco, Los Angeles, Boston, Chicago and Miami, they remain very expensive. Mr. Hatzius and his Goldman colleagues are somewhat more pessimistic than most forecasters, but the difference isn%u2019t enormous.

The bubble is about to burst here too. For Bidonthecity is just a beginning. I heard D-Elliman hired them to sell some of their high end listings. They are going to market 8500sf single family on 74th and 5th together

has anyone here tried to contact bidonthecity? i cant find their phone # anywhere....are they expecting people to just list with them without talking? how does it work?

Looks like they've got their first really high-end listing. Townhouse at 11 East 74th. Min price of 15M is about $6M less than the current ask on the Elliman listing, though still seems to be almost $4M more than the house sold for in '06.

"The glut of foreclosed homes creates a self-reinforcing cycle. Falling prices lead to more foreclosures. Foreclosures lead to an excess supply of homes for sale."

What foreclosures? Do you see any foreclosure in Manhattan? This article is completely useless unless you live in some foreclosure city like Miami or Phoenix.

how will the fact that NY is not a non-recourse nor anti-deficiency state will play on the walk away of people that are severely under water? if i understand correctly even in the case of a short sale a homeowner in trouble could have to make up for the difference ("deficiency payment"). that might not allow people to scape situations in which they are under water even by a lot, lets say half a million dollars, for example.

only 4.5% of NY homeowners are underwater, the lowest in the nation!

It's funny what a million $ can get you nowadays...
When i compare these 2 auctions, i can't help myself thinking that one of these 2 auctioneers is trying to screw the buyer big time....:
http://www.sheldongood.com/longgrove.php
http://www.bidonthecity.com/properties/overview.php?id=1062

Totally. Those bastards in Long Grove, IL, whereever that is!

45mn drive from Chicago...

Anyone know if Bid On The City is going to make results public? There's two auctions that end today.