Crain’s reported yesterday on the two South Loop condo auctions over the weekend that we all have been chattering about the past few days.
In a nutshell: more than 60 condos sold at the two auctions at prices reduced anywhere from 27% to 45% off the last asking price.
“It’s a declaration that the market has stopped going down,” says Garry Benson, Garrison’s president and CEO. “This proves that once you establish in the minds of the public a price/value equation, there is absorption.”
Accelerated CEO Jon Gollinger says that at 1400 S. Michigan the average sales price was about $280 a square foot, including three or four units sold after the auction was conducted. He declines to comment on prices as a percentage of the pre-auction asking price or the minimum bids.
Last March’s Vetro auction was the first auction of high rise units in Chicago this year. It was also a success (in terms of selling all the units available at the auction.) However, units are still available to purchase in the Vetro.
What will this auction do for additional sales at these two buildings?
The auction should spark additional sales not only at 1400 S. Michigan, but also at other South Loop projects, he says.
“The market has not known what to purchase at,” he says.
The 1400 S. Michigan auction did not include parking spaces, which go for about $35,000 a piece. About 25 garage spaces have already been sold, Mr. Gollinger says.
At the Motor Row project, the average sales price was lower, about $185 a square foot, or 58% above the average minimum price. The difference in pricing reflects Motor Row’s location farther from the Loop, and that loft projects, with their varied floor plans, may not be as well-suited to auctions, Mr. Benson says.
At 1400 S. Michigan, sales prices average $278 a square foot, or about 152% of the average minimum price. Demand was so strong that one unit was added to the auction, Mr. Benson notes.
Condo auction draws many sales at big price cuts [Crain’s Chicago Business, Thomase A. Corfman, Nov 16, 2009]