Boston, MA (PRWEB) March 15, 2008
In the 1st Quarter of 2008, property values continue to drop as part of a downward transition in the nationwide real estate market begun in 2005. Although some fortunate investors who bought in the early '90s made great profits selling early, most have watched their equity plummet. By setting unrealistically high asking prices, owners' property is languishing even longer on a slow market, frustrating plans for trapped assets and further compounding U.S. economic woes. As was the case in earlier downturns, auction is the best and quickest path to a real estate turnaround -- allowing owners to sell quickly on their terms at fair market value.
Foreclosures and lenders' Real Estate Owned (REO) portfolios are growing at an alarming rate. In the face of carrying costs, shareholder unease, and increased financial pressure through legislation, within a year, lenders will begin selling large blocks of REO through auction. Countrywide has already started this process which will allow market forces to set new property values.
At first, when large REO portfolios are sold, prices will drop, further eroding the value of individual properties. Eventually, as investors re-enter the market, the huge surplus of real estate for sale will be absorbed, and the cycle will begin again with an upward swing in values. Owners, anxious to beat the bottom and avoid carry costs of 12-20% per year, must sell now or be forced to watch as their equity continues to diminish and then slowly begins to rebuild over the next few years.
In 2007, $58.5 billion of real estate was sold at live auction. More individuals and institutions are turning to the auction method of sale for timely and effective asset disposition. Sellers appreciate the speed of the auction process, prices elevated by competition rather than diminished through negotiation, the degree of certainty provided by sales without contingencies that consistently achieve a 95%+ closing rate, and the opportunity to pass commission costs on to the Buyer.
Auctions stimulate the marketplace by calling prospective buyers to action. Bidders are drawn to the "free market" aspects of auction that ensure they are paying the lowest possible price when they bid one last increment higher than their competition. At absolute auction, bidders are further empowered by their ability to establish the true value of a property in competition with other bidders without the influence of seller's goals. The degree of comfort this reassurance provides is never more appealing than during times of market transition where prospective purchaser's conviction that they will be paying a "fair price" provides them with the necessary confidence to buy in the face of economic uncertainty.
JJManning Auctioneers is now accepting consignments through April 4, 2008 at 5pm for our Spring Auction Calendar. Please visit http://www.JJManning.com or call 800-521-0111 for further information.
Spring Entry Deadline: April 4, 2008 at 5:00 pm
Contact: Justin J. Manning, CAI, AARE - President/CFO
Telephone Number: 800-521-0111 x-223