Once touted by its developer as the centerpiece to creating a Kirkland styled neighborhood on the Kitsap Peninsula, The 400, is now heading to the auction block. According the the Kitsap Sun, starting bids will be nearly 60% below the list price. A 577 sq ft one-bedroom unit listed at $259,000 will be offered at a $109,000 starting bid, while a 1,729 sq ft unit listed at $919,000 will start at just $409,000 $500,000.
Twenty-eight units will be available for auction on April 20th at the Kitsap Conference Center. More info on the auction is available on the REDC website.
Luckily for the original developer, he sold the project to a California firm before the project was built. Apparently, he’s still sold on Bremerton’s condo market as the Sun reported that he “plans to build another condominium development on the waterfront, at 105 units, called The 600.”
March 25th, 2008 at 5:21 pm
That seems like such a bargin compared to Seattle prices. This is an amazing market. Do you know if anyone bought “full price” prior to the auction?
March 25th, 2008 at 6:15 pm
Hey Rhonda,
People did purchase in the project…it’s been on the market for some time.
Note: Updated post with link to auction site.
March 25th, 2008 at 11:02 pm
I highly doubt this is anywhere close to the bargain it seems. All of the condos have undisclosed reserve prices that are above the starting bid price, I would guess by at least 50% or more. Additionally, there is a 5% auction commission on top of a winning bid. I suspect this is more of a marketing ploy than anything else, but it does seem to be working given the coverage it has gotten. The original prices are far too close to Seattle pricing for condos that are an hour ferry commute away.
March 26th, 2008 at 12:41 pm
Is this an absolute auction?
I just read this above on your website, copied and pasted here: “I highly doubt this is anywhere close to the bargain it seems. All of the condos have undisclosed reserve prices that are above the starting bid price, I would guess by at least 50% or more. Additionally, there is a 5% auction commission on top of a winning bid. I suspect this is more of a marketing ploy than anything else, but it does seem to be working given the coverage it has gotten. The original prices are far too close to Seattle pricing for condos that are an hour ferry commute away.”
Is this true?
March 26th, 2008 at 1:00 pm
There is a reserve price on the units, according to the auctioneer’s website.
Specifics info about the auction process, reserve info, buyer premium and so forth are located in the downloadable PDF in the “Disclosures” section of the website.
http://www.redcpublicsale.com/
March 29th, 2008 at 7:07 pm
Does anyone know what the relationship between the starting bid and the “hidden” reserve is? I mean why don’t they just start the bidding at $1 if the “hidden” reserve has already rendered the opening bid meaningless? I guess because the current owners want to keep the reserve hidden, it can only mean this really is just an elaborate marketing ploy. Boy, it really slaps any kind of truth in advertising principles right in the face. It seems the local news media is really lending a helping hand by throwing out the big hook for the auction co. by saying “Starting bids will be nearly 60% below the list price.” What a crock.
April 7th, 2008 at 7:04 pm
And don’t forget the MONTHLY HOA dues. These range from $108 to $350/mth.
If you are in the market, these could be a good deal. They are doing it this way because the condo market in general is very slow. However, they are not going to give these away. The market will drive a fair value, but people need to make sure to do their homework and determine what a CURRENT fail price is and take into account the fees such as the 5% auction fee, closing costs, HOA dues, etc.
My suggestion is to do the homework, determine what you will pay for each unit then go to the auction with that in mind. If you get a good deal, you should get in just under what the current market bears and have equity building going forward.
Here is a good link with some sales prices to compare against.
http://www.condocompare.com/WA/Kitsap/Bremerton/West_Bremerton/West_Bremerton/98337/THE_400/condo_summary.aspx
Good luck!
April 17th, 2008 at 1:21 pm
I am currently staying with friends at the 400. They are very nice. However, having lived in Bremerton/Kitsap County for almost 30 years, I can tell you the Minimum bid price is about what I would pay. There is a reason there are 28 vacant units left. Price being the reason.
If I could get in to one of these at close to the minimum bid price, it would be a fair deal to me.
However, the documentation specifically states the auctioneer will act on behalf of the seller to bid the price up to the “reserve” price and the seller does not have to accept any bid that does NOT meet or exceed the reserve price.
They make it appear the seller is motivated to sell the properties, but I think it is probably more marketing than necessity.
I will try to report back if I hear of any actual selling prices. The Kitsap Sun (www.kitsapsun.com) will more than likely cover teh auction as well.
April 17th, 2008 at 5:02 pm
I have spoken to the auction people, and even if the price someone bids is BELOW the reserve, the offer will go to the owners, then they can choose whether or not to proceed with the sale. I hear they are motivated, so even if the price is below the reserve price, they will very likely take it. This is a beautiful project, and a chance to get a real bargain. I will be there.
I don’t agree with LonH. He needs to check value.
April 18th, 2008 at 3:09 pm
so what’s the purpose of having a reserve price if they’re going to take less than the reserve?
this thing has bait and switch written all over it
April 19th, 2008 at 11:21 am
It seems like they want to see what the market is for all the units and make a decision based on where the prices go. They may hit reserves on some and not others, but make individual decisions based on the overall bids. eg. if they hit reserves on all but 3 or 4 units you can bet they will go lower on those just to get it over and done with. It seems like a smart way to go. This is the only way to find out what the real market is in times like these. It will be interesting for sure.
btw… great blog Ben, thanks for your efforts.
April 23rd, 2008 at 9:25 pm
Apparently, auction goers got good deals with units going for less than the reserve price.
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