The Market Lofts Auction of 55 units in Downtown Los Angeles was a much anticipated event. The advertised $140,000 "starting bids" for 1 bedroom units got many eager buyers thinking -- is it possible that I can get into prime Downtown LA for a low, low price? As the auction hall swelled with bodies, it became clear that many people came to the event with the same question in mind. (For pictures of Market Lofts Units click here.)
Bidding was fast and furious right out of the gate and it quickly became clear that the "starting bids" were far below the actual selling prices. 754 sq ft 1 bedrooms, of which there were many, sold for $298,000 - $316,000. Were these bargains? "Fairly valued" is a better assessment, considering that the same size units on the 9th floor at EVO South, arguably a superior building, were selling for $340,000 as recently as a few months ago.
The rapid-fire pace continued unabated throughout the day. A few buyers were discouraged and left early, but many stayed until the end when four or five units retained by the developer were released for sale. The best deals of the day were the 2 bedroom, 2 bath units, that ranged in price from $393,000 for an 1,138 sq ft unit to $522,000 for a 1,427 sq ft unit. The total developer net was about $20 million -- not bad in two brief hours.
The $/sq ft varied with condo sq ft area. One bedroom units sold roughly for $370 - $420/sq ft and 2 bedroom units sold for roughly $310 - $360/sq ft, smaller units having a higher $/sq ft value.The best deals of the day were a 880 sq ft unit for $310,000, a 1,076 sq ft unit for $362,000 and a 1,308 sq ft unit for $422,000. As the auctioneer states, all final bids are subject to seller acceptance, so there's no guarantee that these sales will go through.
The worst deals of the day were the first two properties auctioned. Both were 2 bedroom 2 bathroom units. One with 1,220 sq ft sold for $485,000; another with 1,427 sq ft sold for $522,000 -- the highest sale of the day. It's hard to explain why these two sales are so far off the norm in terms of $/sq ft value. Perhaps an adrenalin rush?
We can draw a few conclusions from this Market Lofts auction:
1) This auction seem to fairly value the lower-priced properties and to offer a discount on the higher-priced properties.
2) Values were fairly consistent throughout the auction, i.e., sequence in order of bidding did not matter.
3) The floor of $300,000 needed to buy into the South Park neighborhood was clearly established
4) The desire to own a slice of this Downtown Los Angeles real estate is very much alive.
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