REDC ( San Diego Foreclosure Home Auction Review Part 2

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.

USHomeAuction Valuation Difference Graph

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.

USHomeAuction Price Per Square Foot Chart

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.

USHomeAuction Re-auction Chart


6 Responses to REDC ( San Diego Foreclosure Home Auction Review Part 2

  1. […] I said in part 2 of my ushomeauction review, the average single family home price in San Diego was $314,000 while […]

  2. Aaron Norris says:

    Interesting charts. Did you find previously listed values to be recent and relevant?

  3. haystackfarmer says:

    No, I did not find previously listed values to be recent or relevant in comparison to the final bidding price (as can be seen that the average selling price was about 40% below previously listed prices). Please see part 3 of my review for details of the previous valuation price stated with respect to current valuations.

  4. Foreclosures have been continuing to get out of hand as the months go by, but locally things are looking up. It will be interesting to see where this goes.

  5. Gary says:

    No one mentions that most properties have an unpublished “Reserve Price” which means if you win the bid but the bid dosen’t meet the reserve price, you don’t get the property. As a result property goes back to some form of auction, live or on-line. In the mean time the property is not maintained or maintenance is limited, as a result the property deteriorates, value deminishes. The previous value price is really the price the house previously sold for, “bubble price”, as found after researching tax records. Basically the reserve prices are unrealistic and those who are representing the property most likley have not seen the property.

  6. Joyce says:

    Here’s a 2009 update on REDC as I have observed in Texas. I only tracked 4 homes that I wanted to buy and they have been in 4 auctions held in Texas. Each time they are declared “SOLD” only to reappear in the next auction. One example was bid as high as $119,000 on a previous value of $134,000. But there it was in the next auction. My phone calls revealed that it didn’t reach the lender famous “reserve price”. So on very limited data, I have deduced that REDC misrepresents themselves in advertising (ALL HOMES MUST GO, etc)because in fact they only must go if you will meet the mysterious reserve price. Sure, our prices are low compared to California, but so are our numbers of foreclosures. Frankly, my opinion is don’t waste your time worrying over REDC.

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