Wednesday, January 31, 2007

West Coast Home Auctions Market Comparison

West Coast Home Auctions is holding a big auction sale this weekend in Elk Grove. In the spirit of the Priced To Sit series, I ran a brief comparison of the West Cost starting bid prices with the resale market. I also threw in pricing data from two nearby new house builders.

West Coast is auctioning off inventory that Standard Pacific Corp has been unable to sell:

"This is a fast, efficient way for us to close out and complete the project," said Jackie Shipley, the firm's vice president of sales and marketing. "We feel like we've had a lot of success in that community. ... It's important for us to do this and move on."

Shipley said auction advertising already has tripled the number of people coming to see the six houses, the last of a 172-home subdivision called Estancia at Belavida that Standard Pacific opened in late 2004.

Minimum bids will range from $430,000 to $530,000 for the four- and five-bedroom houses in a new neighborhood near Elk Grove's Franklin High School. That means bidders, expected to be a mix of would-be homeowners and investors, must meet at least the builder's minimum price to get the house.

There are currently 256 resale houses (including 74 flippers) on the market within the 6 square-mile area that includes the auction site. The area also continues to be built out, with several builders actively pursuing projects. Finally, a 7,000+ house community is currently being developed directly adjacent:


Like my previous analyses, I have plotted resale and flipper inventory on three graphs along with published builder pricing. For this particular analysis, I chose Dunmore Homes and JMC Homes for comparison purposes. (There was a lot to choose from.):




As you can see, Dunmore and West Coast have done their homework in terms of pricing. Both companies are clearly in front of whatever the resale market is doing. Whether their prices are competitive in an absolute sense, I guess we’ll find out this weekend.

BTW: If anybody is planning to attend this auction, please let me know. I want to do a followup piece in case the Bee chickens out.

9 comments :

patient renter said...

Can't wait to hear about the auction results.

Anonymous said...

I went to watch the auction however I was turned away at the door. Only people with cashiers checks were allowed in to the auction.

At the time when the auction was supposed to start, The room was practically deserted inside. Maybe a total of 7-10 registered bidders.

7 Registered bidders for 6 houses doesn't work out. To have a great auction, an auction company typically wants 7 registered bidders per home. They were no where near that number.

So I'm guessing that very few if any sold.

Why? The minimum bids were WAY to high.

Max said...

That's pretty harsh. I'm not surprised you weren't let in if there was a lack of bidders. The bad press is going to kill them.

What I don't get is why Standard Pacific is fooling around with these guys? Just have a fire sale and bail out.

patient renter said...

"What I don't get is why Standard Pacific is fooling around with these guys? Just have a fire sale and bail out. "

I'm guessing that they're worried about their image. Since they want to bail out of this development and move over to another near development to sell homes, they don't want to give off the impression that they're willing to "give away" anything. A fire sale would have done the trick though.

AgentBubble said...

Looks like they got offers on all 6 according to MLS. I'll do an update once I see what they sold for.

Anonymous said...

The summer of 2007 will be marked by the beginning of the price wars in California between the banks and the builders.

The banks will win because the builders get their money from the same banks they will be competing against. The banks will then cut off their borrowing in late 2007 ,early 2008 to leave many builders in bankruptcy.

Omar Cruz said...
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Omar Cruz said...
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Omar Cruz said...
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