Manhattan Condo Auctions

here some historic perspectives
http://www.nytimes.com/1990/06/24/nyregion/rapid-fire-real-estate-auction-enters-manhattan.html

http://ny.therealdeal.com/articles/going-going-gone-new-york-city-condos-could-hit-the-auction-block

Great, thank you for the article.

These auctions will be very significant if they ocurr in any numbers.

WIll they be a great buying opportunity?

My feeling is that there is a great risk that auction buyers will overpay (relative to future prices) thinking that say 30-40-50% off the peak ASKING prices of the units "must be a great deal", and that the auctions will be a smack in the face to the whole market and cause many delusional sellers to rethink. The auctions will be a symptom of a deteriorating market, not a resolution or cleanup of the excess inventory dampening the market, and will not in any way resolve all the basic economic issues and bubble-fluff madness that has precipitated this market collapse.

The risk of living in a half-empty high-cost building with the potential of taking on others' maintenance or a larger part of common maintenance is enough to scare me away from any auction. That Feb 8 nytimes.com article was pretty scary. Am I overstating the risk?

i share crescent22 apprehension...but if things are that unsettled then ,,,gee whiz kaboom..that is very bad news for this market. Because sooner or later the dust will settle in those buildings ..and it will be clear and knowable what the liabilities are....and there will be some great deals (speaking relative to todays prices).

jim, it will be later rather than sooner. but yes, after a couple of years you can do very well in such a building, as long as you can hold it until any taint goes away.

crescent, it's enough to scare me away from any new development that hasn't closed 90% of its units.

This has already started in L.A. ... I bought my condo in an auction there, at 31% off original asking price. The auction generated quite a bit of press because it was L.A.'s first auction of a luxury condo building:

However not all units are created equal. My building is a particularly gorgeous 100 year old Beaux Arts condo conversion with period details that you just don't in new construction. I fell in love the moment I saw it, and went to the auction to see if anyone would snatch up the unit I liked (the largest and highest in the building.) Of course, there were about a dozen of other people who felt the same way. If I didn't buy, someone else definitely would have--I know because I only bid after I saw other bidders fighting over my unit.

I bought a very spacious 2BR/2BA, which were the most in-demand units and tended to sell for about $50K higher than the minimum bid. But most 1 BRs went at or JUST above the minimum bid, which translated to a 40% reduction off original asking price; and most studios didn't sell at all.

So the 30% off rule applied to 2 BRs in the auction, which sold like hotcakes. Smaller units didn't do as well.