Saturday, March 31, 2007

Flop: Today's Real Estate Auction

Today's well-advertised real estate auction was a flop - a sign of how much the local real estate market has downturned.

Up for auction were six residential and three commercial Key West properties. Most properties didn't receive more than one bid. Some did not receive any.

The few bids that were made for the residential properties were "opening bids" - made prior to the start of the auction and, in the words of the auctioneer, "way off", "not going to sell", and "too far off."

There were no second bids for any of the residential properties.

Sellers reserved the right to sell at a minimum price (which were not disclosed) and it is unlikely that any of the residential properties sold. The auctioneer was so disheartened by the meager bidding that he skipped and didn't bother auctioning off two of the eight residential properties.

Many in the small crowd of approximately 65 people were there for the commercial properties. Most notably was the Harpoon Harry's Restaurant auction which included a liquor license. More than a couple big name local restaurateurs were there - but none were willing to bid more than the opening bid of $2 million. The property received one other bid, for $2.1 million. Unless the seller agrees to that low price, it will not have sold.

Also up for auction was 606 Duval Street and a commercial property on North Roosevelt Blvd. Those properties also received bids that were likely too low for the sellers.

Prices are clearly still too high in the Key West real estate market for where buyers are at. Also, the effects of the liquidity sqeeze may be appearing.

Even the auctioneer commented that there was a lot of property for sale in Key West. No wonder he began the auction with a prayer.
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Anonymous said...

did you see the sunday paper's telling of this story?

Cayo Dave said...

Yes, I did see it.
I still don't know if any of the bids were accepted by the sellers (at the auction is sounded like everything bid was way too low). The Anderson Auction website has not been updated with the results.

Thank you for the "heads up" anonymous! Glad you visited my blog.

Anonymous said...

"No wonder he began the auction with a prayer." Made me laugh out loud. Again, glad I found you! Looking forward to reading more...

Anonymous said...

Talked to Ron Heck yesterday. He said the first he heard that he had sold was when he saw the front page of the Citizen. He says he has no intention of selling at those prices


Cayo Dave said...

Sarah - Thank you for your info! I didn't think he was selling at that bid price. Though I can't remember or find what his listed price was. Do you know?

At first I didn't understand why the Citizen reported the real estate auction the way they did. Then, a new friend pointed out the newpapers may be biased by the huge amount of advertising dollars they recieve from realtors, developers, and the real estate industry.

Anonymous said...

I am sorry but I have no pity for the auctioneer or sellers. Until sellers GET IT that Key West property prices are still overvalued the market will not improve. Some of the local Realtors understand this but others do not and continue to list outrageous prices week after week. A major correction is due esp when looking at commercial property and single family homes. The condo market which was even weaker is starting to see some rebound after prices fell by as much as 20-30% over the past year. The only one making any money right now is the newspaper's classified dept!

Anonymous said...

The starting bid for Harpoon Harry's was $2 million. The selling price quoted by the Citizen was $2.1 million, which includes the restaurant, five studio apartments upstairs and a full liquor license (which can be transferred to another location). All quotes in the Citizen article were attributed to the auction company. Pretty lousy reporting on the part of the Citizen to say they were sold without speaking to Ron Heck and his partner first.


Anonymous said...

Cayo Dave,

Excellent analysis of the b.s. from the Key West Citizen.

And Sarah, you get a gold star for actually calling Ron Heck and asking him what is up with the $2.1 million selling price.

Now if only the Citizen could hire some reporters who actually do their homework.