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Downtown's West Condominium Tower condos are set to hit the auction block at the end of the month. They haven't been able to sell these downtown Raleigh units in this depressed market. I'd say that's a clear sign of the times. So much for popularity. Condo's are a tough sell in a tough market.
In an over-supplied market, they sold quite a few units.
I do feel sorry for the people who purchased before the bottom fell out. Now they'll be upside down when all the other condos sell at auction. It's going to take a long time before they get back to just even.
I do feel sorry for the people who purchased before the bottom fell out. Now they'll be upside down when all the other condos sell at auction. It's going to take a long time before they get back to just even.
Everyone upside down?
How many have loans? For what original LTV?
Will the condos sell at auction? It is definitely a Reserve auction, with price leader advertising to gain eyeballs.
What are the reserve prices?
Are "...all the other condos..." for sale at auction, or only a selected amount from inventory?
Is the auction the true sales venue, or is it only a marketing ploy to pop traffic?
Do they have to sell all 36 condos to meet a goal, or would sales of 10 or 12 pull in enough revenue to make a payment to Wachovia?
Everyone upside down?
How many have loans? For what original LTV?
Will the condos sell at auction? It is definitely a Reserve auction, with price leader advertising to gain eyeballs.
What are the reserve prices?
Are "...all the other condos..." for sale at auction, or only a selected amount from inventory?
Is the auction the true sales venue, or is it only a marketing ploy to pop traffic?
Do they have to sell all 36 condos to meet a goal, or would sales of 10 or 12 pull in enough revenue to make a payment to Wachovia?
Thank you Mike. Your post was insightful and very well thought out. A lot of companies are having cash flow issues and although it is true that these units came on the market on the worst possible time, they have sold quite a few of them, but obviously not enough to satisfy their cash flow needs. I would also be very surprised if any of the units sold for $95,000.
Thank you Mike. Your post was insightful and very well thought out. A lot of companies are having cash flow issues and although it is true that these units came on the market on the worst possible time, they have sold quite a few of them, but obviously not enough to satisfy their cash flow needs. I would also be very surprised if any of the units sold for $95,000.
Mike
I also doubt any condos sell for $95K. This is not a real auction, the highest bidder will not win. They are taking offers to see what they get, to accept or reject.
"Bidders must be pre-registered, and the developer has five days after the auction to accept, counter or reject the highest bid on each unit."
Exactly. They have too many units to left to sell that are not involved in this to take lowball offers as it would kill the builders sales also. They are hoping to just drive marketing or maybe people will think they are getting a good deal and pay more than they would thinking there will be a bidding war.
i wonder if the condo owners who did buy there recently are complaining to the sales office about this auction......it surely does not provide a good image for those who already bought there
As someone who owns condos in both DT Raleigh and Miami, let me give you my insight as to what I think is really happening here. I could be wrong but I could be right.
Lenders (now more than ever) require a certain amount of condos to be sold in order to approve a new loan for a buyer. This is quite the conundrum for both developers and buyers in buildings that ordinarily don't qualify under these new "terms". In Miami, this is playing out as a system of haves and have-nots. The haves are the stable buildings that were sold prior to the meltdown. These buildings are more stable and new buyers can get loans. To a certain degree, these buildings are faring better than the "have-nots". The have nots had to slash prices to entice cash buyers. In turn, cash buyers knew that they had the upper hand so prices sank. How does this affect the condos in Raleigh, you ask? Well, I think what's happening at West is that the developer needs to get a certain amount sold to cross some threshold that lenders require for more conventional loans. To get to that number, the developer is offering the specific number of units for "auction" to fill that gap. Once that lending requirement has been met, they can more easily sell units to those who don't have enormous down payments or enough cash to close without a loan.
Again, this is only my opinion. I have no facts to back this up. I have just seen this play out in a much more severe way in Miami.
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