Market Conditions: Crain’s Reports on Vetro Auction
Crain’s has coverage of the Vetro auction with some interesting quotes on topics we’ve been chattering about here the last several days. Sales totaled $12.1 million.
It appears, that other highrises may be following the Vetro’s lead:
Lenders on other slow-moving downtown condo projects also are considering forcing developers to hold auctions, said Garry Benson, president and CEO of Garrison, which has formed an alliance with Boston-based Accelerated for future Midwest sales efforts.
“The question will be, what is the real depth of the marketplace, and will the next auction produce the same results?” Mr. Benson said.
The Vetro prices were better than expected despite the steep discounts, he added.
Typically, auction prices on similar projects are somewhere in the mid-60% range of the pre-auction prices, Mr. Benson said. For Vetro, the minimum auction prices were 61% of the asking prices, according to a price list.
The Vetro auction sets a floor for future sales at the project, which was completed by Evanston developer Roszak/ADC LLC. About 60 units remain unsold.
South Loop condos auctioned at big price cuts [Crain’s Chicago Business, Thomas Corfman, Mar 9, 2009]
I give it, two, maybe three more before this idea is phased out.
and by phased out I mean it doesnt work anymore..
a: You mean that you believe that the fourth (or fifth, or maybe third) large (i.e., maybe 40 + units) condo auction to happen will not sell out at lender-approved prices? Or something “worse” for the developers?
How do these auctions work? Any good websites that explain it? What do you need to do before hand? Do you just get approved for a mortgage like any other home purchase?
i wonder why ventro didnt dump all their remaining units at this thing when they had the chance. or maybe those additional units they did sell tested that water and they got away with what they could.
so pretty safe to say that a good portion, if not the majority, of these are going to investors who are immediately going to put them out for rent while “the market recovers”? and this is the case with most short sales and foreclosure sales as well? now several other condo projects are ‘following the lead’ of Vetro…?
man, rental prices have only begun to drop…
“The Vetro auction sets a floor for future sales at the project”
*snort*
they will probably move a few at the new list prices set by the auction, but im sure they will still deal from there. this auction is just another step in a race to the bottom – the only thing that reliably moves units right now is to be the lowest price
-The condos went for $258 a sqaure foot ($258,000 for a 1000 s/f unit on average)
-They sold all 45 units put up for auction. However, if you read down in the article, you will notice that the property still has 60 units that are unsold which were not put up for auction! They seem to think the auction will set the floor price for the remaining sells (yeah right)
– Also mentioned is that other developers in Chicago are thinking about holding auctions.
Conclusion: Because you have 60 more unsold units in the Vetro building, upcoming auctions by other developers, and more short sales and foreclosures hitting the market by the month, this auction did very little to set a floor price for these units
Yep. About time the race to the bottom began. The sad thing is so many of these properties waited for so long they this is likely the ceiling. I doubt the next attempt will get this as buyers are few and far between.
How does this prie reduction effet comperables around the neighborhood??
I have been attempting to get ahold of anyone in the sales office for two days to no avail. I wanted to see if any of the remaining units would reflect the auction’s prices and be lowered. By not answering their phones, I assume they are all gathered to figure out what to do next? Although I do have some interest in a unit there, I am left wondering if those 40 who did purchase at the auction will release their properties as rentals and as a buyer of one of the remaining units I would be faced with rather low rent renters. One more day and I will give up on them and look elsewhere. Not a good sign that their website is still advertising the auction days ago! Any comments about renters invading this property now that 40 units were sold at drastically lowered prices?
westloopeo,
Having problems getting ahold of the sales office is nothing new. I tried contacting them last spring on the weekend during hours they should’ve been open to no avail and that gave me pause in terms of buying a unit.
That being said it looks like they are making updates to the website. The first page now reads: “Gavel-Phobic”, “Auction pricing without the auction” & “Recent auction buyers set the prices…and we listened!” When you click on it it still takes you to the auction page.
So give them a few more days to get the website updated with their new pricing/etc.
I’m sure they are busy with the 45 closings.
Maybe they don’t want to hear the screaming, wailing and crying from their previous marks, who, as opposed to becoming more attractive, popular and wealthy, are now just debt slaves?
“The Vetro auction sets a floor for future sales at the project…”
Ummm, no, no it doesn’t.