Monday, February 26, 2007

Hard Rock Auction - Results

As mentioned last Thursday, there was a home auction (actually, it was referred to as a MEGA Auction) scheduled to be held on Saturday at the Seminole Hard Rock Casino. A few surprises but mostly it went as predicted - lots of bids that were far below the seller's reserve price. From Jan Hollingsworth at the Tampa Tribune.

'TAMPA - Scores of gamblers gathered at the Seminole Hard Rock Hotel & Casino on Saturday, but the name of the game was real estate, not roulette.

Alan Westfall was betting he could break even on a six-bedroom home he invested in right before the local market went south last year.'

He bought last year and is hoping to break even? Sorry brother, but if you bought at the peak of the market, you've got until 2016 (or later) before prices will get back to that level. Believe it.

'He hadn't counted on a swarm of bidders betting on a fire sale.

Of the first 10 properties on the auction block, Westfall said his two properties drew the highest bids - $215,000 for a 3,000-square-foot home in the golf course community of Heritage Isles; another $215,000 for 56 acres in Riverview.

"That doesn't make us feel any better," he said. Not when the mortgage on the Heritage Isles place is $150,000 more than that. Not when he was looking for $2.5 million on the parcel in Riverview.

Westfall, like many other hopeful sellers at the mass auction, didn't accept the offers. Each invested $2,500 per property toward advertising costs.'

As predicted, the reserve prices and the winning bid prices were far and few between. Though a few sellers did price aggressively and made a sale.

Now, let's do a quick calc: 46 properties x $2,500 per listing = $115,000. Granted, a lot of work and a bit of overhead went into it, but certainly not a bad way to make money. Some hype from the auctioneer now.

'In the end, it paid off for many of them, auctioneer Jay Bailey said.

"It was weird and wonderful," he said of the event, where 46 properties went on the auction block.

At first, Bailey was disappointed - both with the crowd, which he said numbered less than 300, and with the bids.

The auction ended at 2:30 p.m., a couple of hours before the scheduled 5 p.m. close of bidding.

Then something strange happened, Bailey said. People started cutting deals.

"It's like they were trying to learn how to bid first. I think they reverted back to conventional real estate buying," he said.

Bailey, of Bailey's Real Estate and Estate Auctions, said he doesn't have a tally on Saturday's transactions. Several properties sold. The largest, a 453-acre tract in Levy County, sold for $5,000 per acre in an online bid - $4,000 more than the reserve, or minimum required by the seller.

Other contracts were hammered out after the auction. "We're in real negotiations now with 15 to 20 others," he said.'

In the end - the question is asked again: was this just another marketing gimmick to push overpriced real estate, or a sign of desperation (with more to come)?

24 comments:

lizziebeth said...

I think that $5000 an acre would be a high price to pay, unless they were going to be using it as a cemetery for all the flippers who are going into heart failure, watching their fortunes evaporate.
They could offer free burial, and then just charge a monthly maintenance fee for graveside sevices.

Anonymous said...

Holy cow - $215K bid for a 3,000 square foot house?

Now we're getting somewhere - 1999 prices. That's exactly what you'd get for a place that size down here.

That dude is screwed with a capital "S".

lizziebeth said...

Hey weak eyes!
Finish reading the story. He didn't accept the bid of $215K.
It would have been a short sale of $150K. A bank like ours would never accept an offer like that.
He signed that mortgage with his blood, and if we have to take a pint a month, and sell in the open market to pay my salary that's fine with us.
In our line of business we call it 'blood money'. More red blooded Americans to bleed dry!!

Once again, the real Lizziebeth said...

Jerry,

I would truly appreciate if you would knock off all Lizziebeth and Lissiebeth postings The last few threads. I'm getting tired of that asshole using my name! I left for awhile, and will be leaving again. I love your blog. It's just unfortunate! Hey Fatass, get a life! Trim Spa did wonders for Anna Nicole. Why don't you do us all a favor and give it a try. Add a little Meth while your at it!

Once again the Real Lizziebeth said...

Hey Fatass,

I don't have my money at a bank or work at a bank. Keep digging! Think service industry! Helping others!

Anonymous said...

NASTY LITTLE WENCH ISN'T SHE!!!

|||| ""WOW"" |||

WMT Shopper said...

Gee, when I went to school, they taught us, that people who performed 'undefined' services of helping others in dire need, as prostitutes. You don't keep your money at a bank?????

I fully understand!!!

I really don't think Jerry would appreciate using his blog as a billboard, for your professional services..

By the way, what street are you working??? I truly would like to do a drive by to get a gander of what we are dealing with here!!

Marshall Rinker said...

I always said that Concrete was the strength of Florida. Well, I have some bad news for our customers, and investors. Somebody has been watering down the concrete, so to speak.
From now on, Rinker concrete will be RED, as in red ink of the industry.
U.S. Concrete Predicts 1Q Slowdown,Associated Press NewsHOUSTON (AP) - U.S. Concrete Inc., which makes ready-mixed concrete, said Monday it expects a fourth-quarter loss, due primarily to a seasonal slowdown in the construction industry.

The company said it anticipates a loss of 14 cents per share to 19 cents per share on earnings before interest, taxes, depreciation and amortization in the range of $2 million to $3 million. It anticipates revenue of between $160 million to $170 million.
Last year in the same quarter, the company lost 8 cents per share on revenue of $139.6 million.

Analysts polled by Thomson Financial forecast a loss in the current quarter of 11 cents per share.

U.S. Concrete Chief Operating Officer Michael W. Harlan called the company's first quarter results "typically the most volatile." but added that based on its current backlog and the state of the construction industry it will probably make up the shortfall in the remaining quarters of 2007.

As such, U.S. Concrete also reaffirmed its annual earnings guidance, saying it expects a profit of between 54 cents per share and 60 cents per share on earnings before interest, taxes, depreciation and amortization in the range of $90 million to $100 million. It expects revenue of between $900 million and $950 million.

Last year, the company posted an annual loss of $8.1 million, or 22 cents per share. Excluding a goodwill impairment, its 2006 earnings totaled $18.7 million, or 50 cents per share.

Analysts presently forecast a profit in 2007 of 58 cents per share in revenue of $919.1 million.

Shares of U.S. Concrete rose 4 cents to $8.89 on the Nasdaq Stock Exchange.

lizziebreath said...

Hey Fatass,
Since you can't even find your unit, why would you need my services?

Anonymous said...

So what's the deal with the concrete business? They lose more money than ever, but expect to have a profitable year?

Sounds like the CEO is blowing smoke up you-know-where.

Anonymous said...

True colors always bleed thru, their panties.

sandi said...

I hope they let us know what the final tally was - it would highly informative to know what actually sold at auction.

alpha dog said...

After re-reading the article, it would appear that the actual auction process was a total failure. It seems that the interested parties, went off into dark rooms to do a little lap-dance negoiating for the boys, and some came out with smiling faces.
What happened in Tampa[ons], will stay in Tampa[ons]
Smiling faces tell all.

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