Auction action: Big real estate auctions this weekend

The auction schedule is heating up -- there are several big  real estate auctions scheduled this weekend. Details:

On Saturday at the Pomona Fairplex, Catalist Homes and DoveBid will auction 75 homes. You can see the inventory here.  Registration opens at 8:30 a.m., the bidding starts at 10 a.m. Coverage note: It's likely I'll cover this auction. If you are heading to Pomona on Saturday to bid, I'd like to talk. Shoot me an e-mail at peter.viles@latimes.com.

Sample listing from the Pomona auction:

37701 Janus Drive, Palmdale 93550
--4 bedrooms, 2 baths, 1,498 square feet, built in 1988.
--Sold in April 2005 for $276,000 (Source: PropertyShark.com); currently listed for $225,000; starting bid is $112,500.

Also this weekend: Kennedy Wilson of Beverly Hills is holding a "massive inventory clearance auction" for over 120 bank-owned homes and condos. Starting bids are as low as $35,000, and when you  look at the homes you'll understand why. $35,000 is the opening bid for a vacant, 980-square foot home in Barstow.  The fun starts Sunday, March 16, at 11 a.m. in Ontario.

Your thoughts? Comments? If you're heading to Pomona to bid this weekend, shoot me an e-mail at peter.viles@latimes.com.
Photo Credit: AFP/Getty Images

Comments

[Laker]

It would be nice, to somehow track the closing prices at these auction.
I personally went to some auctions in LA convention center (REDC) back in June/July of 2007. The bidding was crazy and i wondered how these 3000 people are over bidding the properties.
today, i check the value of some of the home sold back then, and those "deal" don't look like deal anymore. Values today are 5-20% lower than what they paid so basically - most of that auction buyers are under water today....
That links me to peter's comment about "some of early 2007 buyers will end in foreclosure..."
So, specifically, 37701 Janus Drive, Palmdale 93550 is worth bidding up to $120,000.
Why???
Simply because this house was sold 02/02/2001: for $119,000.
This is the best and most accurate value of this house.
If you pay $1 more than $120,000, you are overpaying and most likely head to foreclosure....
Considering that starting bid is $112,500 there is not much room for crowd mania bidding....
Good luck!

[puckehad]

4 pages of houses and I only see one in decent/safe location. The rest are either out in the boonies or are in rotten locations. When are we going to see houses in the Westside or South Bay that everyone is talking about?

[sandiegan]

Only 5 in San Diego county.

And none in the city.

[LA-Architect]

It is best to avoid bidding in any type of Auction. Auctions typically always produce better prices. They are hyping Foreclosure Auctions to get people bidding against each other.

To get a deal, you make a lowball offer on a property that has been sitting for months! That's how you get a deal. And, there are no deals yet!

[Michael Snyder]

The nickel question (drum roll please) is whether the banks will allow the market to find some sort of a level through these auctions or will the opening bids be set at unrealistic levels? Bidding at three for a dime; will a sufficient number of qualified bidders show up & will the banks "buy back" properties in order to support market value?

[mbob]

Auction fever is a notorious malady among farm equipment, livestock and antique buyers. The hangover is worse than the buzz.

Yeh, the sold prices will be a good list to have, if someone is taking notes. Caffeine and bribery usually works.

[Cal]

REDC has a huge So. Cal. auction coming up in April as well.

I talked with a realtor of a REO a couple weeks ago, he was losing the listing and it was going to that auction.

So far the auctions have seemed like marketing gimmicks to create a time pressure to move properties, it's apparently been working pretty well.

[Truth2Pwr]

I agree with Laker on this one and would like to point out the paradigm shift that his comment (and others like it) represent.

The days of evaluating prices in terms of how much of a discount they represent off of the 2006 peak have been replaced with looking at them in terms of how much of a premium they are still asking above the pre-mania baseline price. At this juncture, all of the "we expect prices to rebound next quarter" puffery has been thoroughly discredited and there is really no point in discussing what things USED TO go for unless that reference point is prior to 2001.

I used to be a buffed out personal trainer 15 years and 60 lbs ago, but you wouldn't want to bet on ever seeing my six-pack again in this lifetime either!!!

[Laker]

Michael Snyder wrote: "whether the banks will allow the market to find some sort of a level through these auctions or will the opening bids be set at unrealistic levels?"

Michael , as I wrote in my comment above, i think banks are allowing to find market price as in fact the bidding on that specific house starts BELOW its value of $120,000 at $112,000. It is huge $8000 below its value....

[Inland Empire]

After viewing the first auction link and seeing some dreadful things (Louise St. in Long Beach, some of the others in SB and Riverside, Corona), I decline viewing the second link! Yeck!

[Michael Snyder]

Laker,
investorguy might look at a starting bid of $50K for that $112K property you figure to be worth $120K. Now I'm not saying who's right & at this point my interest is purely academic; this is a great opportunity for a "reality check" in this market. Several posters have mentioned the deteriorated condition of the offered properties which will also reduce the property's value below the 2001 benchmark you've set. BTW, not a bad bet for a settling point for the overall market. But repairs will still come at 2008 prices.

[m davin]

Regarding the location and quality of homes, it is important to note that you will not likely see any homes in Palos Verdes, Newport Beach, Beverly Hills, etc. at any foreclosure auction because there are very few foreclosures in great locations. Auctions are used by the banks to move onsold inventory in heavy foreclosure areas.

There is a home in Ladera Ranch in OC that is 3000 square feet built in 2003 that sold for $1,200,000 in 2005.

[TakeFive]

I see some similarity to the stock market bubble collapse with these reo’s. People were buying stock, that was falling because they believed it was now a good deal based on it’s previously inflated price. I know someone that loaded up on $40K worth of Lucent stock on the way down and pretty much lost every penny invested.

This is just the overeager throwing away their money.

[Tim K.]

First of all, this is a lame auction. We get that. It's a bunch of houses nobody in their right mind would want and the bidding prices are ridiculous. Nobody should pay MORE than those opening bids.

This is still really important, because as ludicrous as this auction is, it is one more desperate attempt to try to sell these homes ONE MORE WAY. Most of these homes will be selling for much less a year from now, either through a knife catcher or more likely, nobody bids on these properties and they go back to the bank.

But the neigboring properties, the ones that are actually decent, will drop too.

The biggest home price drops are near the end of a bubble, and those aren't with firesale auctions. Those are when the average homeowner, when trying to sell a house, gets real and just outright LISTS the house for a reasonable price on the MLS. That's the end of the bubble.

[Takeit]

This market is like any other market, the more time, energy, research and dillegence you put into it the more you get out of it. For a knowledgeable investor the time to buy is now, wether it's at an auction, foreclosure or just a regular sale. It seems everyone is spuculating on where the market is going to be a year or two from now. By the time there is enough clarity where the market is it will be too late to find the really great deals, or there will be too much competition to get them when they are there. If your'e smart, do your homework, and have a good negotiating plan you can find great deals out there. “Buy when there’s blood in the streets.” I don't know if anyone has noticed but it's pretty gory out there.

[Theron]

Takeit,

lol, I think you need to be more imaginative. Think about the coming CA state budget cuts. In a year or two those people will actually be unemployed and some will be losing their homes. Not because they overextended themselves but because of old fashioned job loss. We are likely heading into (or already in) recession. What you see running in the streets right now is spilled cappuchino. The blood is yet to come.

[Sam]

Rather then buy these dumps at auction in these slums, for the same money you get a new house in CO, nice hood and you won't get shot. CO will appreciate before this shacks do. What a joke.

[Takeit]

A bird in the hand. Go with what you see not what you think will happen, if you analyze most successfull individuals like Buffet, Gates, and Slim you'll see that they took advantage of situations already at hand, not those that they thought would materialize. Right now is the time. Everybody seems to be slamming these auctions right off the bat, but if you look a little deeper and little longer you'll see there are are some real gems out there for the right price.

[Anita]

I don't think you're going to see too many foreclosures in "decent/safe areas." They happen, but if you check out this data: http://blog.redfin.com/losangeles/2008/03/
foreclosures_take_a_dive.html

you'll see that the vast majority of foreclosures are in Palmdale and Lancaster, followed by the Valley and South Central.

[left of lefty]

i've been to pretty much every single redc and h&m auction since last may. while good deals can be found in them, don't bid unless you know what you are doing. and definitely don't bid if you've never even inspected the place!

however, these auctions are good sources for data that you can use to support your low-ball offers on existing reos listed in the mls.

[John T Watts]

Takeit. Right on the money! some people will end up building real wealth as a result of these auctions. It depends on how well they do their homework and how well their crystal ball works. Most of us won't take the risk and will remain on the sidelines.

[Rico S]

It would behoove everyone to wait. Trust me, So Cal will be back to normal after a while. There is no need to buy in other states just to own a home. CO might sound nice to some, but not to a majority. The people with wealth capitalized when everyone else was following the trend. Don't follow the trend, and you shall prosper.

[Maz]

Take a look at some of the data here
http://auctions.fastrealestate.net - What a mess this country is in right now.

[Shawn]

Our law firm has filed a class action lawsuit against these real estate auction companies (REDC, etc.) and lenders (Countrywide, among other defendants) alleging false advertising and unfair competition. Although I do not have the time to debate the specifics, if you would like a copy of the Complaint or have attended an auction and have questions or comments about it, please email me at:
shawn@kevinspainhour.com.

Thank You