In my previous post about the REDC foreclosure auction in San Diego, I went over the foreclosure auction process with tips for bidders and the faults of the auctioning process. Since the end of January, the Real Estate Disposition Corporation has continued their foreclosure auctions throughout the rest of southern and northern California. Lined up for March will include the areas of Las Vegas, Washington DC, New York, Massachusetts, and Arizona. With January 2008 foreclosures up 57% from the same time in 2007, home owners will still be in for a bumpy ride throughout the rest of the year. California led all states with a staggering 57,000 home foreclosures just in the month of January of this year.
Since you know about the process of the home foreclosure auctions through REDC, I wanted to go through the details and numbers that I accumulated during the seven hour visit at the San Diego foreclosure auction. Seven hours equated to 123 foreclosed properties auctions (combination of single family homes, townhouses, and condominiums). There were at least another 80 auctions left (mainly of areas on the outskirts of San Diego like Temecula and El Centro), but I felt I had enough data from the major metropolitan San Diego areas to get a good idea of the pricing of these foreclosed homes.
Final Auction Prices
Base on the data I accumulated:
1) Average price of single family house – $314,000 (based on 62 auctions)
2) Average price of condo – $204,000 (based on 53 auctions)
From the chart below, you can see the distribution of how much the auctions sold for in comparison to the price that REDC previously values these home to be in their booklets given out at the auction and on their website prior to the San Diego auction. The average selling price of these foreclosed properties is 39.45% below the previously valued prices. The difference from previous valuation to final auction price seems to be quite wide and I will explore those valuations in another article at a later date . One thing to note in the chart below is that only one property actually sold for more than the previously valued amount. That property was a duplex (between the San Diego International Airport and Balboa Park) previously valued at $624,900 and sold for $640,000, a 2% premium. Otherwise, expect the final auction values to be at prices nowhere close to what they claim these properties to be previously valued to.
The majority of my data comes from locations of the primary San Diego area encompassing everywhere from La Jolla, Mira Mesa, Chula Vista, El Cajon, Carlsbad, National City, areas in and around downtown SD, and Escondido. Since I didn’t incorporate data from the properties I wasn’t present for (Calexico, El Centro, Murrieta, and Temecula), I cannot say whether they would fetch higher or lower prices in respect to their previously valued prices. I can imagine that there would be less demand for those areas since they’re farther from the metropolitan San Diego area. Therefore make sure to bid with caution and doing your homework before bidding is the best way to ensure you come away a winner.
For You Statistic Junkies
Below is a chart of the price per square foot for the accumulation of all the auctioned properties I was present for. The average price per square foot of these properties auctioned off ended up being $191.57. You will notice a few points that are above $300/square foot. Those properties are the duplex mentioned above (that sold for more than previously valued price) and a couple of condos in the heart of downtown San Diego which carry heavy premiums just based on the fact that they’re located in prime downtown locations.
Final note: Re-auctioned Properties
Throughout the auction, many properties would sell only to come back for re-auction at a later time in the day due to a number of reasons: conflicts over details of property, inability to finance property, or other miscellaneous reasons. Sometimes these properties will be re-auctioned within half an hour or it may be even longer (I’ve witnessed at least 20 auctions later). I can imagine that the primary bidders who have been outbid for a specific property will have left the foreclosure auction assuming that their desired property was no longer available. Instead, I charted that the 26 re-auctioned homes sold for an additional $255,000 (that is an extra $12,750 in premium’s added to the final auction price that goes into the pockets of REDC). Only 4 of the 26 re-auctioned properties sold for less than they did the first time around, but an astounding 70% of properties sold for more. One 1500 square foot townhouse on Normandy Dr. in Chula Vista was re-auctioned three times total with the first two re-auctions ending at a final bid of $285,000. Yet on the third re-auction of that property, the value dropped $20,000 where it did not go back onto market.