[quote author="graphrix" date=1217515722]It was an interesting day down at the auction. It was good to see some regular IHBers and some new ones. Including one who wouldn't give his screen name but his (maybe) real name. Skek and I have bet going on whether it was Ten or Panda, and I say panda.
There were 189 properties scheduled for today at one time or another. So many were postponed and quite a few were postponed. They announce the postponements and cancellations before the auction begins, so the auction didn't get started until 2:45. Only about 50 were actually auctioned, 2 of which sold, one being <a href="http://www.zillow.com/HomeDetails.htm?zprop=63096478">241 Coral Rose</a> that sold for $430k. Not bad, seeing as how in 2005 it sold for $662,500.
We learned a few new things, like how the auctioneer can be authorized to bid up the price on behalf of the beneficiary/bank. Having been to around 10 auctions so far in the last year, this was a first for me, so it was good to learn something new. After the bidding stopped at around $150k, the bank took it back for that, but the real minimum was discovered to be $309k. Thanks dumb a$$ bank for wasting everyones time, I hope by the time you get around to marketing it and actually selling it it goes for $150k. Maybe the banks are just delaying the process to actually have their unrealized loss become a realized loss this way. Morons. I also got confirmation that there is another auction held there at 3pm, with one at 10am as well. So... you have three auctions at one location and two more auctions at two other locations a day now. Damn... that's a bunch of foreclosures.
It was a good experience, and I am sure it helped those with questions fell better about the process. Maybe I will see some of you there again.</blockquote>
In case you were referring to me as the "undisclosed" blogger, I did mention my screen name, but perhaps you didn't hear me since there were 2 simultaneous auctions at the time. But I rarely post, unlike Ten or Panda, so my screen name would have little significance (plus Chicago is a long way for Panda to come from for an auction). So in the spirit of contributing, some of my thoughts:
The first thing that struck me was the whole informality of the auction, it was actually held outside of the main entrance of the building, with participants standing around the auctioneer who was reading from a stack of papers who you had to strain to hear. The first 45 minutes was non-valuable reading off of postponed or cancelled auctions. Once she got into the auctions, one had just a few seconds to bid before the "going once, going twice, gone". Basically a formality until the handful that the qualified buyers/investors came to bid on came up. In one of these actual bids, one bidder was bidding "pus 1 cent" and another was bidding "plus $100" until the auctioneer finally told them to do the math before bidding. During the hour and half I was there, I observed about 20-25 properties auctioned off, 3-4 actively bid by investors with only 1 actually going to an investor, and the rest going back to the banks. When the 2 pm auction ran late, the 3 pm auctioneer came in and starting barking off his auctions across the pavilion about 15 feet away. What a circus!
I have learned a great deal from this blog, and it has been a major factor in me not buying in this market since returning to Irvine last Sept from an overseas assignment, despite having my firm cover my closing costs, a benefit that is going to expire next month. The only way I could justify buying this summer was to buy at least 15% below market value (i.e. REOs), or about 6-12 months ahead of the current equity burn curve. Speaking of equity burn, I came across a recent appraisal (June '08) where the appraiser factored in 2% per month (24% a year!) of declining value when comparing against recent sales. So I recently bid (and won) on a listed REO at a price >35% below the peak price and about 12% below market value and I still decided to walk - it was one of the first of many REOs to eventually hit this distressed development so unlikely that 12% was enough cushion to the bottom, plus the house was stripped by the previous owner before their eviction. For now, I'm content to continue to rent a 3 BR SFR in Westpark for $2500/month (hopefully my fliplord continues to renegotiate his teaser rates and taxes to hang in there despite being 10-15% underwater).
