Thank you to a reader for giving us the following video. In this news clips, we see huge priced drops at the Platinum Condomium auction. How could there possibly be 50% price drops in these condo prices? After all, the Florida Association of Realtors® (FAR) recently told us, "Miami-Dade condo prices went up 5 percent [in August] to a median of $262,000."
CLICK HERE TO SEE THE VIDEO
This video perfectly illustrates the complete disconnect between FAR's statistics and the reality of the market.
Subscribe to:
Post Comments (Atom)
Stumble It!
6 comments:
5% up. 50% down.
That's not really that big of chasm. Aren't you being a little knitpicky?
I went to the auction. I can't be 100% sure, but I think that most of the bidders were shill bidders. I plan to check the tax records in a month or so and see how many of the condos actually changed hands. I imagine it was less than half-a-dozen.
Of course, CBS 4 is going to report on the shill bidders.
I meant to say, "Of course, CBS 4 is NOT going to report on the shill bidders."
Straw buyers in the Bazzar, Latin Business Practice! Pricemore?
If there were shills, why wouldn't they have just bid the prices up to much higher levels once the real buyers dropped out?
I mean, if the developer didn't plan on selling below a certain price and was planning on using fake bidders to essentially set the reserve price, why not go for a much higher price than 50% off?
I wasn't there, but I have been to other auctions where there were shills.
The shills are used to make the impression that properties are more desirable than they really are in the marketplace. They're also there to keep things moving.
Suppose the auctioneer opens the bidding on the very first condo up for sale and no one bids (the initial bid amount is too high). That will doom the whole rest of the auction. Only the most diehard buyer will bid after that and will not be willing to pay much more than the opening bid.
On the other hand, if auctioneer has two shills get into a bidding war on first condo up for sale, it creates excitement and a false impression of value when the auction the remaining condos.
A shill bid here and there will also make real buyers pay a little bit more for the condo than simply paying the opening bid.
Even if a developer were willing to let all the condos go for the opening bid, they would still place shills there just to squeeze a few extra dollars out of the real bidders.
Shills are ridiculously common in real estate auctions.
Post a Comment