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Monday, Auguts 20, 2007

Miami condos to be auctioned

In the middle of a slow-moving market, the developer of Platinum, a Miami condo development, is taking the remaining unsold units and is auctioning them off. Experts think this will be a progressively more common practice by Miami developers.

The Platinum Condominium, a brand new condo project with 119 units, located at 480 NE 30th St. in Miami, plans to auction off 20 of the remaining unsold units on September 20th at the Marriott Hotel ballroom. Eight of them no matter the price will be auctioned off.

The Platinum Condos, in the middle of Miami’s emerging Edgewater District, boast panoramic views of Biscayne Bay and are within a short distance of the Carnival Center and downtown Miami.

It is hard to imagine that finding buyers would be difficult in a building that is complete with hot tubs, a fitness center, stainless steel kitchens and marble baths.

Louis Fisher of Fisher Auctions said the main reason for rushing sales and auctioning off the units is to accelerate the sales process. But with slow sales because of the soft market, Platinum Condos will try to motivate buyers into the project by giving them the chance to buy at their price.

Miami condos have not seen a move like this one since the condo bust of the 1980s, when new units were auctioned in bulk across South Florida. Recently, both online and in person, individual Miami condo owners and companies converting apartments into condos and single-family builders have already experimented with these types of auctions.

But South Florida condo developers, who have built numerous new towers, have not adopted these auctions to help them move unsold units.

Market watchers predict that there will be more to come, given the expected conditions in the Miami condo market. The amount of Miami-Dade condos sold dropped last June by 52 percent from the same month a year earlier but the prices have increased year-over-year to a median price of $275,500.

A real estate analyst said auctions are not necessarily a bad sign but another marketing tool. To sell units, developers are adopting a range of new measures from generous incentives to offering temporary lease back units.

The auctions in the 1980’s were not always successful. The Miami condo market was in such a state of glum then and there were no buyers. That is not the case today because there are still buyers for Miami condos; they are just looking for better deals which they know are possible.

The auction at The Platinum Condominiums had an interesting loop. Typically an auction institutes a floor price or minimal price at the start of bidding. If there are no bidders because the minimum is too high, the seller keeps the unit. At the auction on September 20th, developers will sell eight of the 20 units regardless of the minimum price, meaning the highest bidder, no matter how low the buying price, gets the unit.

We are all very curious as to how much each of the units will sell for and will keep everyone posted as the prices become available.




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