Parkside At Alexandria 47% Off! 30 Condo Auction!
Update, Mon Oct 29 07: After reading about this auction, go over to the Parkside of Alexandria Auction RESULTS show (with videos).
Update 2-21-08: Eos 21 Just announced an Auction. More soon.
Just on the heels of my article New Construction Bargains: Risks or Rewards? on whether the “deals” at new condo constructions like Phoenix Condos in Arlington, were good ones, I get an email about Parkside Alexandria having an Auction on Oct 28th 2007.
Their advertisement is based on a “Minimum Selling Pr
ice”* of $225,000. These units went for as high as $425,000 in the heyday!
If they sell for that price, that is about 47% off! So NOW is it a good deal?
Again, I’m not saying to avoid new constructions since they might offer a deep discount versus a similar resale unit, but you have to look at their inventory levels and the risks of them unloading units like the condo townhouses of Parkside Alexandria.
Remember, it can ALWAYS go lower! No matter how much of a deal you think you are getting, it can always go lower. So when do you buy? Perhaps only when you are ready for the long term hold and can ride out any waves, or like I say in my Attn. Market Timers! The EXACT Best Day to Buy!, the day that you stop caring about finding the best day to buy, and simply want to enjoy YOUR house.
So what about this 47% off sale? Is that a good deal? Is THAT the bottom? I don’t know, but, like a broken record… it can always go lower. You would think that at that level of slashing, it can’t go down any more, but you never know. Nobody would have thought that they would have pulled back from $425k to $325k. That would be unheard of! Now at $225k… ???
Mad Money’s Jim Cramer put it well… He said the single best time to buy the Nasdaq Index was when it fell from 5,000 to 4,000. But so was 3,000, and 2,000 and 1,500!
Is your risk LOWER than somebody that bought a house at $300k or $400k, sure, but there is still risk. Risk has to be evaluated and measured versus the potential reward and return. Will buyers at $225,000 make a killing? Very possibly. Is it a “no brainer” for a Virginia real estate investors to jump in? I don’t know. Not for me, but then again, I’m too conservative and conservative people miss all the great opportunities.
* Minimum Selling Price MSP is a “reserve auction.”
Sometimes reserve auctions are fake since the reserve isn’t published and is sometimes right up near list price. They can be designed to entice potentially interested buyers to bite. For example if three people put in low balls below the reserve, the homeowner will just counter like a regular contract.
At the Parkside at Alexandria the MSP is published and is significantly under list price, with the hopes of attracting enough buyers to hopefully have people bid up from $225,000 to as close as full list price as possible. But then again, they might all go at $225k (for the 2 level townhouse). I’ll try to go to this event and report on it. I bet the attendance will be pretty good. Here is more info: ParksideAlexandria.com Here is the ad
What will other builders have to do to avoid the INCREASE in buyer fears that this will create? Will they agree to put $50,000 in escrow for a year to insure that the builder won’t drop auction off the rest of the inventory? If they don’t offer some insurance, buyers might just wait and wait and wait and these auctions might become more frequent because of it.
Which project will be next??? Sign up for this blog (upper right corner of blog) for free to make sure you are kept up to date on the marketplace. or Subscribe in a reader.
Feel free to forward this email to others that might be interested.
- Written by Frank Borges LL0SA- Broker/Owner FranklyRealty.com
703-827-4OO6 Please report all typos, I don’t like looking stupid. If you like this post, sign up for new blogs daily, use the form on the right of the page.
Here are other new construction communities: Parkside of Alexandria, Eclipse, Parkside of Courthouse. Condominiums at Carlyle Square, Bryon, Palatine, Phoenix, Turnberry Tower, Odyssey, Hawthorn, 1800 Wilson, Westlee, Vantage Merrifield Town Center, Bromptons, Brittany, Bearings in Old Town, Renaissance 2230, Park at Courthouse, Butterfield, Mercer. Parkside Alexandria
- 4
- October
- 2007
Thank you, and Wow! I’ve subscribed to your blog, and I need to re-read the current issue (it made my head spin…)
Thanks for your revolutionary ideas!
Thank you for a great blog. You state that your thoughts are based on conservative thinking. Thats fine. These are the same thoughts that go through a potential buyers mind considering bidding on a property at public auction. There isn’t a buyer on earth that wants to purchase in a downward market knowing that in 6 months they could have purchased it $25,000 less.
I have to take issue with an assumption you made concerning “Reserve Auctions”.
Your Comment, “Oftentimes reserve auctions are fake since the reserve isn’t published and is sometimes right up near list price.”
Reserve auctions are fake?. A reserve is generally not disclosed to anyone and is a price that the Seller NEEDS for the property in order to sell it. Thus, what is fake about it?. Most sellers have realistic expectations of what their house should bring on auction day. It is my job to bring to them the Fair Market Value on that particular day and time. period. The difference between seasoned Auctioneers and those that want to see their name in the paper is that I interview my potential clients. Out of 5 properties I look at for auction I MAY take 1 for auction. Why? mostly because the “Reserve” is too high. I am a believer of letting the market dictate the value of the property based on condition, the area, construction, etc. Comps do not lie. If the Reserve is too high….you will not see my name in the ad.
Second Issue,
“if three people put in low balls below the reserve, the homeowner will just counter like a regular contract.”
Sellers do not bid at my auctions. Period. This is not a foreclosure where the bank will openly bid sometimes in order to sell the property at debt. If we do not reach the reserve, I confirm the sale with the sellers and will make the appropriate announcement of whether the property will sell or not. Thats it! If the sellers do not agree to the sale, your buyers or the bidder certainly has the right to ask what the reserve was after the auction.
I enjoy your Blogs, keep up the great work in Virginia!
Hey Robert!
Thanks for your perspective. I am NOT an Auction expert, and I’m trying to learn more about it.
As for the fake comment, it almost seemed like you kind of confirmed it. You only accept 20% of the auction opportunities. Meanwhile the other 80% have reserves that are too high and are used to find out who is interested. I call those fake. Whether the better choice of words was “oftentimes” or “sometimes” or “occasionally”, I’m not sure, but it happens.
For example, if a seller needs to get $500k, list price is $550,000. They perform a sexy sounding “auction,” they don’t mention there is a reserve of $500k. They get offers that get bid up to $470,000 from 3 parties and the auction doesn’t occur, I can’t imagine the seller not trying to offer $500k to the buyers. Or telling the buyers (like you said) “the reserve is $500k, are you interested”
With so many marketing tricks, it is hard for consumers to know which auctions are “real” and which are just marketing.
As for what a seller “NEEDS” I know of many sellers that need more then they can get. Everyone needs more!
Thanks!
Frank
p.s. I even heard of an agent running auctions just to get a roomful of perspective buyers (like Open Houses don’t sell houses, but they give the agent leads)
Hi Frank –
I just attended an “introduction to auctions” class down at my Board of Realtors today. It’s an interesting way to sell a home.
The auctioneer that put on our class said he doesn’t use a reserve, but advertises the starting price – usually about 30% below the highest price that it would be listed for. He said that if he can get 3 bidders, he usually gets about 90% of that number. BUT the sellers have to be willing to let it go for the low starting price if only one person bids!
Not worth it even at those prices.
“he usually gets about 90% of that number. BUT the sellers have to be willing to let it go for the low starting price i”
Yep. The way to get the highest price is to start the auction very low, attract the bidders who want a “bargain” and let them fight against each other.
This is a Great Post! The State of Michigan just got around to requiring Auctioneers to be licensed (I wonder if it had anything to do with the crazy amount of foreclosures… ???). One of the questions I have always wondered was what is the use of appraisals by Auctioneers if any.
The other thing that I can not seem to get out of my little question box is how much longer are the current homeowners in a development now looking to see any or if any equity?
I am sure that if I was an investor I would be attracted to the price… but I do not know if I would want to buy in a development controled by the builder or developer for fear of them doing that to me in the future.
Frank,
Surfing around it looks like you were a major player in the firm that started this whole parkside renovation / conversion (though -i assume- you are now no longer connected to it?).
My question is simple: This blog entry was a ‘feature’ of yours (the sale), yet you did not do “full disclosure” of your past participation. Don’t you think your readers would want to know of your past involvement? Why not fully disclose what you know now, and knew then, so your readers have the ‘full picture’.
I checked these out. Cracks in the walls and ceilings in the closets scared me. Looks like they cosmetically touched up the walls, but you can see the poor construction and structural problems by looking in the closets. I’m staying away.
I checked these out. Cracks in the walls and ceilings in the closets scared me. Looks like they cosmetically touched up the walls, but you can see the poor construction and structural problems by looking in the closets. I’m staying away.
Does anyone know what happened at the auction at Parkside at Alexandria yesterday, 10/28? So curious to know what the units went for. Best, Nicole
So….are your going to write about the Parkside auction? Also, wrong link…
I have just posted an update about the Auction on Blog.FranklyRealty.com
including 2 videos and a price sheet.
I can’t find the Parkside at Alexandria blog. I don’t see it on blog.franklyrealty.com
Where is the blog about Parkside at Alexandria?
FYI…the Parkside at Alexandria blog/pricesheet/video is not posted anywhere that I can see.
I don’t know what to tell you, it is on the main page of the blog. Try emailing me for a direct link.
Frank
(use the email link on the right side of the page)
hey Frank,
talk about market timing…
looks like you bought a place at Parkside and flipped it during the heydey of real estate speculation… a full 18 months prior to the auction. well done!
:-)
Frank,
Great post~I’ve subscribed to your blog!I will keep reading.
Chris Webster
Buyer’s Choice Realty
Cherry Grove,SC
“Heals” is the wrong homophone. That should be “heels.”
I like your blog. Normally I don’t find typos – but there is one.
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