Real Estate Auctions are Expected to Grow to 30% of all Home Sales in the Next 36 Months

12/07/2004
Real Estate Auctions are expected to grow to 30% of all home sales in the next 36 months.
By Ken Berzof
The Courier Journal

The Highlands Auction drew $720,000 for a house that was assessed at $248,000. The home sold in 14 minutes! In the past year, it took an average of 72 days for a home to sell in the Louisville area, according to the Greater Louisville Association of Realtors. But on Thursday, under sunny skies and in front of more that 50 bidders and perhaps another 100 onlookers, a historic Highlands home sold in about 14 Minutes - in a spirited Auction.

"It went well. It was a bit overwhelming, but I'm really pleased with the result," said Deana Law the beneficiary of a trust that sold the house at 1815 Casselberry Road off Speed Avenue. The winning bidder, Lenora Paradis, said that although she's a Realtor, she likes Auctions. "It's a fair way to sell a lot of property," she said. "It's quick, absolute and you don't have to renegotiate during an inspection."

Auctioning residential property is common in many countries, and in the United States, "it's definitely a growing trend; people are beginning to realize it is not a last-resort option," said Steve Lewis, the treasurer of the National Auctioneers Association. A recent study revealed that residential Real Estate last year generated $11.8 Billion in Auction sales, which was up 12.6% from 2002 and represented 6.1% of total Auction revenue.

"It's projected that in the next three to five years, a third of all Real Estate will be sold by Auction in the United States," said Robert Shively, chief executive of the Kansas based association.

"People are becoming more comfortable about Auctions because of the Internet," Lewis said. "It has increased visibility of all types of Auctions." Steve Sweazy, an Auctioneer and Realtor said the main advantage of an Auction is that, "it leaves the upper end open. There's no limit to the value when selling because of the bidding process. You can get more than what you think it's worth."

At the Highlands Auction, the bidding started at $525,000 - for property assessed at $248,480. The bidding rose quickly in 25,000 increments, stalling at $700,000. The winning bid - $720,000 - was from Paradis, a Realtor, who said she bought it on behalf of a couple of preservationists who plan to re-sell the property and prevent commercial development.