What’s the fastest growing niche in real estate, one that’s seen an increase in residential sales volume of 48% in the past 60 months? The answer is auctions, they’re growing while just about everything else in commerical and multifamily is flat or declining.
Last year $59 billion was sold at live auctions according to the industry’s trade group, the National Association of Auctioneers. This year, with commerical real estate in a free fall in some urban areas, auction volume is expected to be even higher.
But why should owners of investment property give serious consideration to auctions. Sheldon Good & Co, one of the largest real estate auction company’s in the U.S. says auctions are most effective during accelerating markets, like we had in the boom years, and during decelerating markets like we have now.
In an accelerating market, live auctions of investment property where all the due diligence is available to fully vetted bidders gathered in one room, can push prices far beyond what the seller thought was possible.
In decelerating markets auctions are used to cut loses. Carrying costs are limited immediately and sellers usually get a higher net return than they would have gotten by leaving the property dangling on the market for months.
Live auctions have become key elements of the 2009 distressed property marketplace. They are being used to establish true market values in environments where people aren’t sure what the values are.
Banks are increasingly using auctions as loss mitigation tools.
Bottom line: Consider addding auctions to your strategic plan if you need to sell in a down market. They’re not a panacea but they due work.
Tags: real estate auctions, vero beach properties, vero beach real estate