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The auctioneer strikes again

E-mail|Link|Comments (2) Posted by Scott Van Voorhis November 9, 2009 09:00 AM

Another arguably ill-conceived luxury condo complex is hitting the auction block.

This time the address is 20 South Ave., a stylish mid-rise sandwiched between the Natick center commuter stop on one side and the rear of the police and fire stations – complete with parking lot views galore – on the other.

It’s a project I am somewhat familiar with. I live half a mile away in a fixer-upper village colonial that cost less than half what 20 South’s developers at one time hoped to get from prospective buyers.

I also cited the project in a story I wrote for the Globe last January about condo developers who were plunging ahead, despite the economic hard times.

At that time, the project’s builder had already abandoned hopes of selling his units for more than $600,000 and was looking farther down the price scale.

Alas, even pushing prices down into the $500,000s and below does not appear to have done the trick, with plans to auction off 13 units of the mid-rise’s 24 units on Nov. 19.

It is just the latest such condo auction locally, a tactic to move units in a still slow market that is slowly picking up speed, both in downtown Boston and the suburbs.

The Nouvelle, a downtown Boston condo high-rise built at the Natick Collection, recently auctioned off 42 of its 215 units. One unit literally came with a $1 million-plus discount, selling at $570,000, down from the original, $1.6 million selling price.

It’s not clear yet what the pricing will be for the 20 South auction. In a twist, two units will be sold for whatever the high bid happens to be, with no minimum.

But it’s shaping up to be another example of a bubble-era condo project gone south.

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2 comments so far...

Sounds like another "auction" that's more designed to generate free advertising than actual sales. They're auctioning two units, and merely attempting to sell 11 more at the same time. I'd say the "twist" in this "auction" is that the seller will pay the high bidder $3k if a deal doesn't happen.

To review, in a normal sale, various buyers will submit offers to the seller. The seller will (in most circumstances) inform the low bidders that they've been outbid, and give them a chance to make a better offer. Eventually there is only one buyer left in the picture, and he negotiates price directly with the seller. In the case of the 11 units being "auctioned" here, the same thing happens, but live. Once the auction is over, you'd better believe that the seller will continue to try and negotiate with the high bidder.

Posted by James November 9, 09 12:08 PM

It is not unusual for an auction to have a "reserve" price, below which the seller will not commit to a deal. This is not the sort of "advertising" that a seller usually seeks. I think it is more like testing the market for value, since the original assumptions are obviously out the window.

I think the issue with this particular building is that the building design just is not very attractive, compared say to the nearby townhouses at the end of South Ave or the redevelopment of the old Natick armory both of which are just plain more pleasing designs. Even the design elements that appear meant to reflect the neighborhood are strange in a way that looks like an inexperienced architecture student. For example, it's just strange to echo on a massive scale the curve of the roof over the entrance of Casey's diner.

The units may be very nice and habitable, but a so-so to unattractive look for the building will.pretty much always inhibit interest.

Posted by D.C. al Fine November 10, 09 10:01 AM