Update: Auction of new homes in Gardena

A number of you have asked for an update on the auction of new homes in Gardena Village, which took place May 10th. Here's an NPR report on the auction, which reports that 18 of the 24 homes were sold in 37 minutes.

NPR quotes CataList Homes President Mike Davin saying he was "thrilled' by the bids at auction: "I think this type of format shows that you can bring together the interested buyers and they can set the price for the project, which means the builder was able to get 87 percent, 88 percent of the last listed price," Davin says.

In a brief e-mail exchange, Davin said he now has offers on 20 of the 24 homes, at prices ranging from $535,000 to $595,000. "This represents about a 15%-20% discount to the last sales prices," he said.

Interesting tidbit: NPR reported, "About half the prospective buyers were Korean, reflecting Gardena's large Korean immigrant community."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Hat tips: Numerous, via e-mail and comments, thanks folks.
Photo Credit: CataList Homes

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Comments

[TakeFive]

"CataList Homes President Mike Davin saying he was "thrilled' by the bids at auction...said he now has offers on 20 of the 24 homes..."

Now for that little matter of closing. And remember – coffee’s for closers:

www.youtube.com/watch?v=TROhlThs9qY

[potentially NSFW: Language]

[Uncle Billy Climbs Mont Pelerin]

Yep, if you look at Koreatown you see a little Korean mini-bubble still happily frothing away.

If they're not buying with tons of cash it would be interesting to find out [hey blogger!] if catalist or an "affiliate" arranged the loans and what sort of loans they were.

Yup, this is one for the tickler file -- check how many actually close.

[Chris]

Thanks Pete for the info. It makes me sick that these places went for so much. I just can't see it....but that doesn't mean it's not there..........

[Steve]

These poor suckers got screwed. I firmly beleive now is the time to buy, but not these dumps that border a ghetto. If I am correct you could buy a nice house in Torrance for less money and not get muged. What chumps

[shockg]

Why do you fools have such a hatred for buyers? Because they are doing something you don't have the b@lls to do? Because you feel threatened that they are jumping in before YOU are ready to buy and might trigger market stability?? What is it??

[Tokyo Temp - ex LA Renter]

This is truly nauseating.

I liked the comment about the guy with 'check' in hand. I wonder how much was written on that check? 1%,3% 100%?
I'd also like to know how many of these the transactions go all the way through.

I'd have to agree with Steve, the people who bought these homes in that neighborhood at that price are 100% Grade A chumps.

Fool + Money = Fool without money

[Jonah LaFollette]

Some people think just because you buy something at an auction that it's automatically a good deal. $595k for Gardena??? LOL

[peter m]

"In a brief e-mail exchange, Davin said he now has offers on 20 of the 24 homes, at prices ranging from $535,000 to $595,000. "This represents about a 15%-20% discount to the last sales prices," he said"

I am very suspicious about that statement regarding the offers. Unless those making the offers are really stupid on the local, regional Re trends in that area. I hav e seen those homes and they are not worth $350,000 tops.
Basicaly they are a step above townhomes and of average quality, just large simple enormous stucco boxes. large yes but with no yards and no privacy.
And they are off a very busy mall-crammed busy commuter blvd( artesia) and right behind a busy shopping center.
Area around it has deteriorated more than i thought , and across the street large sections have been leveled and razed.
There are not large populations of Koreans in that area at all, maybe korean shopowners but not a large korean residential polulation. Gardena is 15% Japanese, 40 % hispanic, 10 % black, 15 % white , and 20% other ethnicities.
Gardena is lower middle working class sliding toward marginal poor area, and is close enought to Compton and SCentral to get the crime element in abundance.
A few parts of Gardena, mainly the small southwestern area adjacent to torrance, might be okay but the northern and eastern parts are pretty ghettoish. These auctioned homes fall right in the gray DMZ zone.

[waitingforgodot]

I'll bet the buyers are willing to pay so much because of the excellent public schools in Gardena. *drumroll please*

[pablo]

thanks pete ,
i bet less than 1/4 close over 500

we will see?

[Myriad]

Anyone go see the auction? I was only able to see the last 12 homes, but the bidding was hardly "frenzied." Of the 12 homes I saw, only 7 were sold.

The 7 that did sell were priced at $505k, $505k, $510k, $515k, $512.5k, $520k, $515k. Well, not including the 5% buyer's premium.

Also got a call last weekend asking if I was interested in any of the units remaining. I have to agree with peter m that these seem overpriced considering the neighborhood and schools.

[Susan]

That 15-20% discount from the last asking price is pretty typical of what I've been seeing around Redondo Beach.

It doesn't sound like this auction helped buyers get anything in the way of exceptional value. In fact, the prices still sound outrageous.

Obviously there are plenty of over-eager buy the dippers out there.

Score one for the builder for getting some inventory off the books.

[jason]

i know the area. yikes! i hope they budgeted in the cost for private schools.

[Tom Hatten]

Not the worst neighborhood, but this development on a former Honeywell factory site was stalled for years over toxic soils. The flower beds at the adjacent shopping center are fenced to keep patrons away from the dirt. Nice deal for 1/2 a million!

[JW]

If it's true, a colony of knife-catcher's will be living in those over-priced homes. In just a few years, they can all write letters to Angelo Mozillo and complain about the high price of their loans. Oh well..................the parade of the ignorant and uninformed keeps marching forward.

[Ramador]

Sounds somewhat similar to my former neighborhood in Alhambra where the vast majority of residents know little and care even less about the macroeconomic trends involved. Houses put on sale in my immediate area (just north of Valley Blvd and east of Garvey) seem to sell within a few weeks of going on the market. It's very understandable that these buyers (usually first or second generation Chinese) want to live as close as possible to their community and businesses. I'd be surprised if sellers aren't getting full asking price as well.

[RZ]

Wow, just when I thought consumers were wising up, at least 18 idiots have gone and paid too much for homes in Gardena. Is critical thinking and prudence in purchasing too much to ask of our fellow citizens?

[tealeaf]

we sold our primary residence last year (not to short the mkt, shock - it was a job change from oc to la).

asian buyers pull up in a mid-nineties, beat up honda accord. based on the car, i'm thinking 'yea right.'

we tussle with an offer, agree on terms. dude puts $500k cash down, takes out a then-conforming loan at $417.

same stucco box zillows now for $100k less.

i almost feel bad, but a fool and his money soon part.

and that was only 7 months ago.

[bob]

anyone here know if the seller approved these offers?

[bob]

I am one of these persons who won the bid for these units, the problem is we are still waiting for the seller's approve after 12+ days, although they promise us seller will decide if or not they will accept our offer within 5 days.

Now, I believe this auction actually is a joke.

[Jackie Romulo]

Wow. I am really shocked at the price that these sold for, especially considering what you can get for that same amount of money elsewhere, and in a better school district and area. Wow.

[Geek Seek Finds an Important Comment]

Bob: Please keep the blog posted. Your story should not get lost in the flood here. Maybe send Pete an email so he can stay in contact with you and ask some better questions as well.

Did they set you up with a lender, are you working with your own lender, or are you doing this all cash?

[bob]

Yes, Indymac bank is seller's suggested banker.
No, we do not have >$500,000 cash in hand for this house, we have to get loan also.

The interesting thing I found is at least 2 more winning bidder withdrawed the offer last week, I may withdraw my offer also this week if they still do not tell me their decision.

I will keep your guys updated.

Bob

[Uncle Billy]

Bob: these people play a lot of games. It's nice to hear what's really going on from you. Do you lose your deposit if you pull out?

[bob]

20 days passed since the auction in May 10th, we still did not any decision from the seller.

I decide to get out of this game.

Do not believe this kind of auction anymore.