Even at high end, home auctions a tough sell

Selling a home these days is tough. Some people try warm cookies and helium balloons. Others give away free washers and dryers. But what if you own million-dollar properties? The kind where you don’t ask about a mortgage because there is no mortgage?
Here’s the answer from a luxury real estate auction held in Sarasota Friday by SKY Sotheby’s International Realty: If you want to move waterfront mansions in a hurry, it’s best to settle for 40 cents to 70 cents on the dollar.
“The current market has been dysfunctional,” said SKY president Chad Roffers, whose company offered up 79 homes worth about $200-million in a giant lawn tent at the private Long Boat Key Club.
“Homeowners learned what fair market value is. We had 400 buyers from four countries and 18 states. The market was here.”
Homeowners also learned the limits of auctions, a method gaining favor this year to provide an amphetamine rush to a slumbering market. About 30 of the 79 properties sold on Friday. Some were auctioned, but required a minimum bid, while others were sold “absolute” — best offer takes the property.
While Roffers proclaimed the day a triumph, none of the three Pinellas and Hillsborough County properties on the block ever passed Go. One 5,200-square-foot waterfront house at 6161 51st St. in Bayway Isles in St. Petersburg, originally listed for sale at $2.4-million, couldn’t rustle up a minimum $800,000 bid.
Another of the higher-end waterfront properties, listed at $11.9-million on Longboat Key’s Gulf of Mexico Drive, also failed to sell.
Considering their ability to toss around tens of millions of dollars, many of the buyers were a secretive lot. Participants paid a $10,000 deposit just to win use of a blue bidder’s paddle. If they won, they had to write a check for 10 percent of the purchase price on the spot.
“It’s the aftermath of irrational exuberance,” said one anonymous millionaire with a British accent from Southeast Asia who — no doubt enjoying the weak U.S. dollar bargain effect for foreign buyers — scooped up four properties for about half their recent value.
His son chimed in: “This is a market wake-up call. Forty to 50 cents on the dollar: I think this is the new reality.”

Read more here about Friday's auction.