Monday, February 11, 2008
Las Vegas Real Estate Auction
[Content Disclosure: Poker 0.3%; Real Estate 77%; Economy 19%; Life's Ups and Downs 44% or 4%]
Many of my readers have no idea what I did with my life before poker. While I have had several incarnations as far as employment goes, my most enduring profession was real estate. I was an agent in Los Angeles, then I taught real estate for several years and finally I co-owned a mortgage company in Manhattan Beach for most of the '80's.
With the current downturn in the market I have been following the distress sales here in the Las Vegas valley and attending a couple of foreclosure auctions each month. I am both attempting to gauge the bottom of the market and searching for a place to live, as I will be relocating this summer. I can attest that the blood is not yet flowing in the streets of Las Vegas but the situation is not good if you are on the builder/seller side of the equation.
Yesterday, there was an auction of 83 condos from the bankrupt developer to the public. These were new, mostly unoccupied condos in northwest Las Vegas (Summerlin). The auction was held at the Palace Station with 400+ registered buyers (to be a registered buyer you needed to show up with a $5,000 cashier's check). The opening bids ($89,000 for 2 bedrooms, $119,000 for 2 bedrooms) were all quickly opened from the "investor's table". Two bedrooms actually started at $125K and threes began at $150K. Despite the fact that these condos had been previously listed $75K to $100K higher, the true extend of the "deals or steals" being made were unclear as the sale ended. The value of these properties will be based on the first resales but it is clear that if you bought any of the other 120+ units in this project at anywhere near the "list prices", yesterday you took a big hit in your equity position.
Real Estate auctions are interesting social phenomenon. They really do use a fast talking auctioneer, they have tuxedoed staff out in the audience clapping and cheering on each bid. They have a side room for immediate loan qualification and at least a dozen "sold" properties came back to be sold again after the high bidder was unable to supply credible documentation for the purchase. Most notable in the midst of the noise and stilted auction frenzy were the two sullen gentlemen seated at the front of the room marking down each auction bid. Say hello to the developers, nary a smile all day from these gents.
I ended the day by heading down to the Palace Station poker room and playing through a rake of whites. It was a tight $4/$8 game with a whole lot less gamble than those folks upstairs at the real estate auction.