Owners hanging on to properties FROM CRAINS NY

real Estate Get Crain's Real Estate feed via crainsnewyork News Deal Watch Submit a Deal Events Video Premium Membership January 23, 2011 5:59 AM Will city see more condo auctions? Don't bid on it Owners are hanging on to properties as housing prices stabilize. Share Print Email Comment (1) By Amanda Fung [+] Enlarge SALE: At the New Amsterdam Condominium, 26 luxury apartments will be auctioned.... [more]

real Estate Get Crain's Real Estate feed via crainsnewyork News Deal Watch Submit a Deal Events Video Premium Membership January 23, 2011 5:59 AM Will city see more condo auctions? Don't bid on it Owners are hanging on to properties as housing prices stabilize. Share Print Email Comment (1) By Amanda Fung [+] Enlarge SALE: At the New Amsterdam Condominium, 26 luxury apartments will be auctioned. Filed Under : Astoria, Halstead Property, Paramount Group, Residential Real Estate, Top Stories, Washington Heights Where : New York, New York City, Manhattan, Uptown, Queens, Astoria, Washington Heights Next month, bargain hunters will gather at the Roosevelt Hotel in midtown for a chance to bid on 26 luxury apartments at the New Amsterdam Condominium in Washington Heights and 25 condos at East River Tower in Astoria, Queens—at discounts of up to 63%. As appealing as that sounds and as popular as such sales have been in many other cities, the fact is that such auctions are exceedingly rare in New York. And contrary to widespread predictions at the height of the foreclosure crisis, they are likely to stay that way. Despite the obvious appeal to buyers of having all or most of a building's units go under the gavel, the city's landlords—including banks—are going to great lengths to avoid auctions. That's why there have been just three auctions in New York City and only one in Manhattan since the real estate market crashed in 2008. And with housing prices now stabilizing and even rising in some parts of the city, most of those owners are increasingly likely to hang on. Close, but no auction “I would have expected to do three to four auctions in New York,” said Jon Gollinger, founder of Accelerated Marketing Partners, a consulting firm specializing in auctions. Instead, he's come close on four occasions, only to have the sales called off. Meanwhile, his business elsewhere has boomed. In the past three years, he has conducted 37 auctions for high-rise luxury condo developments in Boston, Philadelphia, Atlanta and elsewhere. Many credit the absence of auctions to the relative strength of the city's residential market, which managed to skirt the precipice that markets in places like Florida, California and Nevada tumbled over. In Manhattan, the median sales price dropped 31% from the market peak to its low point in early 2009 and has been stabilizing since last year, according to appraisal firm Miller Samuel Inc. That contrasts with some other cities, where the median sale price fell more than 70% and has yet to stabilize. The strength of the New York market has also made banks less quick to foreclose on troubled projects and developers less likely to throw up their hands and call in the auctioneers. “In general, most developers think that auctions taint their project,” said Stephen Kliegerman, executive director of development marketing at Halstead Property. “Many have thought about it, but they have deep pockets to carry the building and just end up renting their units.” One of Mr. Kliegerman's clients, an East Harlem developer, is considering an auction for unsold units at his new development but is struggling with the benefits. One issue is the upfront cost of marketing an auction event, an expense Mr. Kliegerman says can run to about $5,000 an apartment. Flop in the Bronx The results of the city's biggest auction, the sale of 54 units at a new development in Riverdale in the Bronx, are not encouraging. Less than half of the units actually sold in November 2009, even at discounts that averaged 45%. More than a year later, the developer is still selling units. Auctioneers, however, insist they are not giving up on the Big Apple. Mr. Gollinger, for example, is now pitching his services to equity funds and others who are snapping up distressed properties at deep discounts and are looking for quick ways to convert the unsold units to cash. “We're actively talking to people in the boroughs,” said Max Spann Jr., president of Max Spann Real Estate & Auction Co., which opened a New York office last month. Meanwhile, Sheldon Good & Co., which is organizing the two events next month, recently moved its headquarters here. And Paramount Realty USA, which held the first and only condo auction in Manhattan so far during this down market, expects to announce its next condo auction by the end of next month. Two years ago, Sheldon Good held a successful auction for a 16-unit condo in Greenpoint. But in that case, the goal was just four sales. Most experts predict that some auctions will take place at smaller developments outside of Manhattan, in areas that experienced a construction boom. “While the market here has stabilized, developers still have inventory to sell and construction loans to pay off,” said Misha Haghani a principal at Paramount Realty. “Condo auctions may not become mainstream here, but they will pick up some momentum.” Filed Under : Astoria, Halstead Property, Paramount Group, Residential Real Estate, Top Stories, Washington Heights Where : New York, New York City, Manhattan, Uptown, Queens, Astoria, Washington Heights Share Print Email Comment (1) Top Headlines MTA, Port Authority heads to keep jobsCity to spur Water Street arcades, street lifeJ.C. 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