San Diego, CA (PRWEB) August 7, 2009
RealEstateInvestor.com (REI) is reporting that the fastest growing niche in real estate is auctions. According to Realty Times, this niche has seen an increase in residential sales volume of 48 percent in the last 60 months.
While commercial and multifamily sales are declining, auctions are actually booming. Just last year, $59 billion was sold in private live-auctions, according to the National Association of Auctioneers.
Several proponents of the auction method of marketing income real estate say auctions are useful, especially for distressed properties.
As first reported in an interview with Realty Times, Alan Kravets, president of Sheldon Good & Co., one of the largest real estate auction firms in the U.S., says that auctions are most effective during accelerating markets, like the boom years for residential and commercial properties, and during decelerating markets, which we have currently.
When live auctions occur in an accelerating market, prices can be pushed far beyond what the seller initially imagined due to competitive bidders.
In decelerating markets, many sellers use auctions to cut their losses. During these times, you can immediately limit your carrying costs and get out of a bad situation, usually at a higher net return than you would have received by leaving the property hanging on the market.
Live auctions are also being used to establish market values in some areas, the Realty Times article reports, and banks are increasingly using auctions as loss-mitigation tools.
During our current down market, you might want to consider auctions as a part of your strategic game plan for your investment options. While not a cure-all, they are helpful and can help cover your losses.