With all these condo auctions recently closing and a few more coming up soon (Brix and Gallery), I was curious if looking back at a few, how good the getting was. I crunched some numbers using the auction results for Press Condos, Queen Anne High School Condos, and Lumen. Some of the summary stats worth noting are at the end of this post. A few takeaways:
- Auctions offer solid values but since most current asking prices are already at a discount off of the high's for a couple of years ago and sellers have wiggle room, things tend to be significantly cheaper at auction but not tremendously cheaper than buying at current prices with good negotiation.
- The sweet spot appears to be with projects that were mispriced from the beginning where the seller might not have been keen to make a huge drop or multiple little ones but has reached a point where they're ready to move on and move all the units in one afternoon. E.g., Lumen was overpriced for some time and ended up auctioning the rest of the units at an average discount of 40% off the original asking prices. Five Lumen units sold at 1/2 of their original selling prices at auction.
- Auctions seem to favor dispassionate investors. If you have one unit you really love, you might get a decent deal but if you're open to the second tier units in the same building, you can be opportunistic as the auction proceeds. The rub is the best deals are usually the 2nd choice units so you need to make sure you've done your homework and established your walkaway prices long before the auction begins (especially factoring in that sub-prime units will always require a discount off any market condition when you're ready to sell it).