Press Archives
| 3News.com | November 23, 2009 |
| Cheap condos in New York hit auction block | |
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It's part of a growing trend in the United States. Fifty-four unsold luxury condo units will be auctioned off to the highest bidder, offering New Yorkers a rare chance at a discount on real estate.
The 20-story Solaria condo, in New York's Bronx borough north of Manhattan, offers sweeping views of the Hudson River with units ranging from one to five bedrooms -originally priced from US$600,000 to US$4.35 million.
Joseph Korff is President of Arc Development.
"The starting bids are about 55 percent less than the current list price, but we don't know where the bidding will end up" he said.
Korff says the auction is about easing consumer fears.
"How do I get rid of the fear factor that has frozen the marketplace for a very long time. Now that housing has stabilized and interest rates are at historic lows, I think the auction is the way you get rid of the fear factor".
In the United States, real estate auctions are more common for homes in foreclosure, but according to real estate analysts, developers are starting to turn to auctions as a way to sell new homes in a battered economy.
Jonathan Miller is the President and CEO of the real estate appraisal firm Miller Samuels Inc.
"We're coming through a credit crunch and essentially the housing market here has fallen anywhere from 20 to 30 percent since September of 2008, and in order for developers to be able to move a project, they've got to discount to the new market"
Miller said in New York and in other parts of the country, the construction boom a few years ago, combined with easy mortgage lending, fuelled a surge in development. The housing collapse and the recession have left many properties unsold.
The Solaria opened in January 2008, but since then only ten units have been sold.
Bids at Sunday's condo auction in the Bronx will start as low as US$299,000.
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