Recent Auctions – Opportunity or Compromise?

April 1, 2008

A reader has called my attention to the following article about an auction of new homes in East Oakland.    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/01/BUJJVTBTK.DTL.

This is the kind of thing we haven’t seen much of in San Francisco, but it’s interesting to know what could happen if there were a true glut of new homes owned by a single developer.  But a buyer showed up for every single unit – albeit at a discounted price – and the developer said they still had their “head above water.”

 The same reader attended a rare event in San Francisco last week – an auction at 41 Federal Way of a 1 bedroom waterview luxury condo.  This was a single bank owned unit (it had been the subject of a foreclosure).  The unit sold in a matter of minutes for just about $700,000.  This was more than $80,000 off it’s last list price of $781,200 and $180,000 off the price it sold for in December 2006.

Overall, our market in San Francisco remains strong, with the long term trend looking more like Carol Lloyd describes (for once I agree with her) in her March 14 article (http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2008/03/14/carollloyd.DTL&hw=slum+Carol+Lloyd&sn=001&sc=1000).  However, as our savvy reader points out, there are opportunites in this market, if you are willing to compromise on location and jump on a bargain when you see it.
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