West End Condo's - On the Auction Block

This Saturday, the West End condos will take their turn on the auction block. These luxury condominiums will have to take much lower prices in order to move their high end units. Just a couple of weeks ago, the Terrazzo managed to auction off 30 units at an average of 33% off list price. Now the Terrazzo has re-set their prices to reflect the new pricing structure. West End has not hyped their auction to the extent the Terrazzo did, which may mean even better opportunities to bidders.

Below, I have reprinted a recent article in the Nashville Business Journal on the upcoming auction. If you are interested, you can scroll down my blog for more articles on the Terrazzo, the West End, and the Nashville condo market. If you would like more information on the West End auction, you can go to their web-site here. You can also contact me if you have other questions and/or would like pre-registeration information by going to my web-site.



After Terrazzo, all eyes on West End
Monday, November 23, 2009
Nashville Business Journal - by Eric Snyder Staff Writer

Days after Saturday's auction generated 27 sales inside the Gulch's Terrazzo condominium, attention is now turning to the auction of 45 units in The West End Luxury Condominiums on Dec. 5.

Twenty-one units were sold to the highest bidder Saturday, at an average square-footage rate of $235, an average of 62 percent of original list prices.

Grant Hammond, a real estate broker with a focus on condos, had said he was monitoring the auction to gauge the viability of the downtown Nashville condo market. Monday, he said he was encouraged by what he saw.

“I feel like that downtown living is probably a little more viable than it was the day before the auction,” he said.

Though not all of the 35 units on the block sold Saturday, Hammond said 27 sales is still a strong figure — particularly because Terrazzo units are not eligible for FHA loans, thereby limiting the number of potential buyers.

“The auction itself has proven that there is $7.3 million ready to move in one day, in one building,” he said, referring to the total value of sales Saturday.

While other condos may be forced to lower their list prices following Saturday's auction, Hammond said that won't be based on Saturday's average rate, which he called a “one-day anomaly.”

Hammond likened Saturday's sale to a bon-fire — what comes next, he said, will be a “slow burn” that won't require such drastic cuts to square footage rates.

What will have a bigger impact on area prices, he said, is when Terrazzo revises its list prices for remaining units. Crosland Tennessee President Bill Barkley, developer of Terrazzo, acknowledged Saturday that list prices will be revised downward.

Hammond said those revisions will have a larger impact because, unlike a one-day bon-fire, they will be informing the opinions of area buyers and realtors as the new prices remain posted on the local MLS for the weeks and months ahead.

The upcoming auction of The West End units will be conducted by Jerrold Pedigo Realty. Owner Jerrold Pedigo said that, though he has hasn't fully explored the data resulting from Saturday's auction, there may not be many conclusions to draw on The West End auction as a result.

“I think the Terrazzo and The West End are two different products,” he said.

A number of units will be sold at The West End without a minimum reserve, though how many — and what the reserve will be for the remaining units — has not been finalized, Pedigo said.

Like the Terrazzo auction, there will be a possibility of ending the bidding early.

“That's the case of most every auction you'll see,” Pedigo said.

That The West End will sell all 45 units seems far fetched to Hammond, who estimated that 20 of the units — some of the largest in Nashville — will sell if they can be bought, like Terrazzo units, for 33 percent discounts.

And while the Terrazzo auction drew 250 people and TV cameras, Hammond said he hasn't seen the same level of marketing for The West End auction that would draw such a crowd. He said he spoke to some potential buyers Saturday who hadn't heard of The West End.

“It's been an anecdote to the Terrazzo auction,” he said