The newest trend in the depressed areas that are south and east of our strong local real estate market is the auction. The Mercury News featured a front page article today about one being held on Saturday morning in San Mateo. The properties being sold are REO, (Real Estate Owned) which means that the lender banks have already foreclosed and are now the owners of record. This is the third such auction in the Bay Area in recent months, and about 150 properties will be sold. Many of the houses and condos will sell for 20-30% less than the most recent sale prices of similar properties, but very often, the auction atmosphere will raise the selling price way over the opening bid figure. In any case, the lenders are protected by an undisclosed "reserve price" that sets the lower limit that they will accept.
One reason residential auctions are seeing a boost: The growth of online auctions such as those held on eBay as well as offline charity auctions have made the general public more comfortable with the process of bidding. I admit to being an "EBay Junkie" who gets caught up in the excitement occasionally.
They expect to see as many as 2000 at Saturday's auction, many just there for the show, but others who are seriously looking for an investment, or a home or condo to live in, at a price they can afford.
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