Online Luxury Real Estate Auction
A recent trend in the luxury real estate market is online auctions, although, much like the bricks-and-mortar auctions recently, the goal seems to be generating interest rather than actually holding an auction. One recent example is Wrentham House, an 1891 stone and shingle mansion on Ocean Avenue in Newport, Rhode Island, which hit the online auction block on July 6th. The mansion had been previously listed at $14 million, but the opening bid was just $6.5 million after the property remained unsold for 4 years.
The auction was pulled just before it began, with the owners claiming to have found a buyer and under contract. Most of the auctions we have covered recently have failed to make a sale – largely thanks to un-realistic reserve prices and selling luxury real estate requires innovate thinking sometimes. Those sellers with deep enough pockets are still waiting for a recovery, while many buyers seem wary of making a commitment in what still appears to be a downward trending market. This is of course, translating into very low sales volumes. Rhode Island for example has seen just 20 sales of properties over $1 million in the first 5 months of the year compared to 68 in 2008.
Lila Delman was the agent, and it would appear that the auction was a success, in that a sale was made, so perhaps this is a constructive way of generating interest, if not actually concluding an auction. At the end of the day, it is the sale that matters, not the route taken.
