Condominium prices in Manhattan are low and inventory is up. Developers who began construction at the height of the market are now faced with empty buildings stocked with every possible amenity. Owners of luxury apartments are finding that buyers are hesitant to invest in their prize property. In order to cope with the new face of the market, brokers are trying a new tactic: auctions. Auctions are both a way to attract bargain-hunting buyers still on the fence on whether to buy and get the condos sold quickly.
Starting bids are at times more than 50 percent below the list price. One of the less expensive one-bedrooms at an apartment represented by Alfred Real Estate, for example, has a $299,999 starting bid but was originally listed at $660,000.
“Buyers are still afraid of making a definite decision,” says Dan Babush, principle broker at Alfred Real Estate. “Potential buyers are still worried that prices have yet to bottom out—and I would be wary of that. It’s possible that this is the bottom, but an auction is a good way for people to feel like they got the best deal possible.”
“There are amazing luxury properties now up for auction,” says Erica Bunin, principle broker at Alfred Real Estate. “And an auction puts a sense of urgency on the buy. If it’s your dream property, you better show up, or it’s gone.”
Real estate auctions are the fastest growing type of auctions, growing by 47.7 percent between 2003 and 2008.
Brokers at Alfred Real Estate have witnessed the popularity of auctions and believe it’s a sign that the market is beginning to recover. At a recent auction, attendance was more than twice what brokers had expected, and average bids were nearly 10 percent higher than expected. Now is the time to invest in Real Estate, and auctions are a great way to get a fantastic deal on your dream home.
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