With just 30 percent of their condos sold at a time when they had hoped to have 80 percent spoken for, the developers of the Bluestem, a contemporary residential building on Wolf Road in Westchester, announced this week that they will put the remaining units up for auction in July. It is the latest in an emerging trend toward auctioning off slow-moving condo inventory that at least one auction house says is dwarfing all the old numbers.
“The amount of over-supply in the marketplace is opening opportunities for us,” says Frank Diliberto, the president and CEO of Inland Real Estate Auctions, whose company will auction the Bluestem’s 32 unsold units. On Monday, Inland got another 41 units, this time at the Avalon, on Washington Street in Oak Park.
In all, Inland has between 114 and 120 newly built or renovated condos to auction this summer. Last year, Diliberto says, “we probably had 20 or maybe 25.”
For the Bluestem developers, the move to an auction “is our way to generate a quick push,” says Rich Gloor, the head of Oak Park’s Gloor Realty and one of the partners developing the six-story, 46-unit project. “Sales have been plodding along, and we want to move on to other things. We want to make sure we’re out of this project before we go forward with others, so let’s wrap this up.”
Gloor predicts that other developers will take the same route, and in particular, he expects to see a sizable increase in condo auctions in the fall, after a summer of disappointing sales.
Diliberto says the auction has become more popular for single-family homes and for sellers of individual condos; auctions of a builder’s condo inventory are the logical next step. “Everything is bought and sold at auctions now, at the eBays of the world,” he says. “That’s helping to mainstream the residential real-estate auction.”
Inland recommends that anyone considering buying a home at auction first attend one of its seminars on how a real estate auction works and what is required. For more information, call (630) 990-5353.
While Diliberto says there is no way to calculate (or guarantee) how much buyers save at auction, the final prices typically favor the buyer, not the developer. “I can tell you for sure that it sure beats buying retail,” he says.