Brix and Gallery Condo Auction Results
The take away from the Brix and Gallery Condo auctions, held on September 27, 2009, is that there is a strong demand for condo ownership and condo deals. Between the two auctions there were at least 500+ people in attendance, though not all were bidders. The bidding was very active and virtually every auction lot was competitive.
I think it’s fair to say the results exceeded people’s expectations (selling prices were higher than anticipated). The winning bids at Brix averaged $410 per square foot and sold for approximately 70% of the last offer prices (30% discount). The results at Gallery were equally strong, averaging $439 per square foot and selling for about 68% of the last offer prices (32% discount). In comparison, the last auction at Lumen averaged $347 per square foot and sold for only 62% of the last offer prices (38% discount).
Upper-level one-bedroom view units at Gallery were going for as much as $550 per square foot, while lower-level alley facing units averaged about $350 per square foot. At Brix, the one-bedroom flats commanded higher per square foot prices, generally above $400, while the multi-level lofts and townhomes were in the high-$300’s.
Per Schnitzer West, the auctions generated nearly $30 million in sales. In all, there were over 420 bidders who attended the two auction events, with more than 3,300 total site tours in the weeks leading up to the auction.
Click below for PDF:
Brix Auction Results
Gallery Auction Results
View available Brix and Gallery condos for sale.
From other blogs:
Urbnlivn.com: Brix & Gallery Auction Wrap Up
CHS Capitol Hill Seattle: Did The Brix and Gallery Auction Buyers Get a Good Deal?
Courtney Cooper: Gallery Auction Results: Belltown Real Estate Unveiled
Urban|IMG: The Auction Results
The question now will the 28 Million in sales yesterday, Assuming they all close within 30 days, be enough to save Schnitzer or will we see another auction when the next note comes due?
Your simple takeaway holds true in our market too. There is a very high demand for condos in Leavenworth (mostly for vacation homes), despite the fact that we still have huge amounts of unsold newly built units. Consumers are looking for deals and if they can get one they might buy, if not they will continue to window shop.
I was at the auction and I think I figured out how the auction is “arranged”.
(1) They did a great marketing (by repeatedly telling people only 60 – 70 people registered to bid) so that about 600 people showed up for each auction.
(2) The price is increased at a pace of 25K, 10K, 5K, 1K in decreasingly order. If no one takes 25K incremental, then the auctioneer goes to 10K incrementals.
(3) Before both auctions the auctioneer repeatedly stressed that you are only outbid by at most 1K by your competitor so people should take advantage of that.
(4) Here comes the gist: there are a couple of auctioner’s “friends” sitting among us, those people jacks up the price by offering 25K incrementals, so a 295K starting price quickly becomes 445K. Because people don’t want to lose out by 1K, they are tricked into offering 5K / 1K incrementals.
(5) The best units are first to be auctioned, so after a few crazy biddings, the price has been established (60+% increase over startng bid for good units). And 600 people in a crowded room really went crazy. Also the person bought 1020 (first bid unit) in Gallery is clearly fake.
(6) I am not saying all buyers are screwed by the auction, maybe they entered the market at the exact bottom. But I think I will be very skeptical if anyone tells me that there are deals to have in those auctions again.
Kevin said it all. I think the same. Also, it’s so shifty that there’re a couple of units added to the auction list in a last minute. Not many people would have a chance to see it before the auction day.
I wasn’t there, but curious to know why you say buyer for 1020 was ‘clearly’ fake?
Kevin,
I think that auction showed that the market has bottomed (for now). The prices weren’t a steal but they seem “fair” given recent comps on Zillow.com. I’m more concerned about Point 4 which you made – are you sure that some of the bidders in the audience were planted there by the auctioning company? Interested to know as that’s not only an unethical practice but possibly illegal (purposely distorting legitimate bidders’ perception of “market”)!
There were no plants. Auctioneers have been in business forever. 1 auction in Seattle = small potatoes (little red ones). Approx 250 people registered, not 600. 250 plusish people including their spouses and agents. So, yeah, 600, but not really 600. Kevin doesn’t know what he’s talkin about. No offense Kevin.
I was there too and completely agree with Kevin. The 25K increases were very, very fishy to me. Units went from 185K to 350K in about 30 seconds, not something I was expecting. I was also troubled by the longer than usual cries to bid higher when a unit was about to sell for a ‘good’ price. The auctioneer would ask and ask and ask until finally their shill, or what i assume was their shill would increase another 1K forcing the person who wanted the unit to pay 2K more than they would have if the auctioneer had just said ‘sold’ instead of waiting and chatting and waiting some more. If you think the company running that ‘show’ was ethical, I’d put big money on you being one of the people who bought a condo yesterday. I also agree that adding units at the end was very shady.
Justin Bowers, I don’t know where you are coming from. But I think people who actually went to the auction have mostly agreed with me so you are wrong or not being honest.
Samuel Yassar, I know exactly which unit you are talking about. And I strongly suspect the bold gentlemen who bought at 25K incremental. He is the one who pushed the first unit to a ridiculous price in a suspicious-looking bidding war as well.
Let me just say that I understand all the winning bidders bid the final price at their own discretions, and they should be responsible for that. Whether they got a good deal and I missed out, only time can tell.
The people above who say the bidding wars were staged in some way have no idea what they are talking about.
The whole bid process for a condo took all of about 3 minutes, so it is no surprise that it only took thirty seconds for the price to go up quickly. I was involved in the so-called first bidding war and lost. The property was bid up by me and the gentlemen who eventually won. That was the best property in the auction. Anyone who studied the unit would know that. It was also the only unit that came with extra parking. I wanted it, but it passed my maximum price point and I let it go. I’m glad that I did because I won a subsequent acution that was a much better deal.
The person who won was determined to buy that first property and good luck to him. I saw him in the closing room later signing the papers to buy the property.
I bought a comparable unit later and got what I think was the best deal in the auction.
James – Congrats on the purchase. I too was at the auction and believe that for $128k less by going down a floor, with little change in view, you got a far better deal than the other gentleman who won the first unit. You can buy quite a few extra parking spots for the savings.
We are having a very constructive discussion on another blog and someone pointed out that shill bidding is legal in many states.
I also saw another great post from a real estate agent on CHS blog. Basically what he was saying is
– Everyone got a “fair” deal, not eeven a good deal. (I concur this because the price for a couple of Gallery units sold at the auction is only 6 – 9% lower than the price they offered me a month ago, and that’s before all the bargains I can do.)
– The winning bidders do enjoy greater security & stability for those buildings, and that can’t be priced accurately. (I also concur this. I will be too scared to buy at Gallery a month ago, but now with 40 others buying at the same time, the building’s occupancy has reached 50%).
Can anyone speak to the number of units still available at both properties?
great comments everyone, especially those that were there.
i HARDLY think this is a *sign* that things have “bottomed” – seattle was still positive 2 years ago when the rest of the company was negative. so we’re one of the last ones to fall and people are still in denial. it was only a few years ago that the average PPSF in belltown was 300 or less. the gallery had some nice features, but it also had some very poor design choices and the location is a bit sucky.
i expect prices to continue to fall for many years….
Anita: Gallery and Brix should have new pricing on the remaining units next week. They’re working on catching up from the auction for the next few days. But, should see reduced pricing very shortly.
Too much drama. It’s just plain stupid to buy a condo in the first place.
Anita – according to a representative at Schnitzer West, Brix has about 30 homes remaining while Gallery has around 90. When the homes return to the market, they will be available in phased releases. We should be getting pricing by next week.
Good news – Schnitzer is anticipating FHA approval in early November. FHA has become more prevalent and offer buyers a great low-down payment option with a low interest rate.
it sounds like an overoptimistic conclusion – at best – to conclude that there’s “strong” interest and that this auction means something for the market. i’m adopting a wait and see attitude for a few reasons.
1. it sounds like the fast auction pace + possible shills – may have gotten people all emotionally charged up and perhaps overbidding more than they had intended.
2. there is an $8000 housing allowance that will vanish in the next 60 days – that’s an artificial stimulus that will go away
3. i do not think the gallery units will be selling at these “new” prices. we’ll see about that. absent the thrill of the auction, i just can’t see that happening…but time will tell.
there is no shortage of other buildings with excessive inventory, and plenty of other deals. i just don’t htink people will be lining up for these.
we’ll see…
I was not at all impressed with Gallery. I’ve been looking at the building for over a year.
I finally got to take a good look during the pre-auction walk throughs. Observations:
– Many of the units had very narrow living rooms
– A lot of the layouts in general were very awkward. Who wants a nearly 800 sq ft studio (ex unit 618)?
– Baseboard heating, really? In a $700k condo? (The really small units had the heaters sticking out of the walls 4-6 inches!)
– The A/C units were *very* loud
– Poor placement of networking/cable outlets. This is just inexcusable.
– Painted concrete slabs everywhere. I like concrete in lofty units (see Rollin and Mosler), but only if it’s unpainted. Painted concrete just looks gross
– Not great quality cabinets
Overall, it just seemed like the developer put very little thought into the units beyond “how much money can we make?”.