I spoke with Carl Carter, public relations manager for J. P. King...

I spoke with Carl Carter, public relations manager for J. P. King following the auction of 40 condos at the Hamptons at Tampa Palms. 171 bidders from 15 states arrived and 40 units were sold. The planned sale was 40 absolute with another 60 units with a minimum bid. In addition there were another 160 the developer still owned and wanted to sell. What follows are excerpts from that interview. Mish: Can you describe the auction. Carter: The auction was in a format called 'High Bidders Choice'. The winning bidder had a choice of condos in pool of similar picks, typically by unit size. There were 1 BR, 2 BR and 3 BR pools being auctioned and the high bidder had his choice of units remaining in the pool. Mish: How many units of each type were sold? Carter: 20 2-bedrooms units, 15 3-bedrooms units, 5 1-bedrooms units. Mish: What was the price range on the units sold? Carter: $130,000 to $200,000. Total auction proceeds were $5,900,000.Mish: Does that include auction fees? Carter: YesMish: What is the primary reason developers are resorting to auctions right now? Carter: Condo sales by normal methods are practically dead and carrying costs are eroding the developers’ anticipated profits. Sellers are looking for a way to preserve profits or minimize their losses. Mish: What happened? Carter: In short, developers overbuilt. The market was distorted by speculators who were flipping units for a quick profit, and that made it look like demand was higher than it was. When the speculators disappeared, reality set in. That reality is coming as a huge shock to many developers and flippers alike: Units are just not going to be sold for prices anywhere close to what was being offered a year ago — no matter what marketing method is used. In many instances flippers are competing with developers to sell units. This is pushing prices down. Mish: Is this a Florida thing only? Carter: No, but Florida probably has the biggest oversupply. We are getting calls from developers every day, and several attended the Tampa auction just to see how it works. Some developers who last year had never even thought about an auction are seriously considering it. We have done condo auctions recently in Door County Wisconsin, Austin Texas, Florida, Alabama and Michigan. Mish: What about supply and demand issues? Carter: Demand is still very weak, and supply is still increasing. From that perspective it just seems very unlikely that we are close to a market bottom. Mish: Are you speaking nationally or just Florida. Carter: I am speaking nationally, but when it comes to the oversupply, Florida’s the national situation on steroids. Mish: Was the auction a success? Carter: Definitely. We had 171 bidders from 15 states -- more than four bidders there for every unit we sold. That’s a good turnout, which tells us we got the current market value. The developer would have offered 60 more units if the prices had been running higher. This is simply a weak market. Still 40 units is a lot of units to move in a weekend and the developer is happy to have reduced his carrying costs significantly. From the point of view of the buyers, many are pleased with the bargains they received. In a response to a question as to 'developer interest' Carl Carter informed me that approximately a half dozen developers showed up to witness the auction. Obviously those developers wanted to see how things went. Previous Listing PricesCarter noted that previous asking prices on the condos were in the neighborhood of $181K for the one-bedroom units, $239-289K for the two-bedroom units and $309-340K for the 3-bedroom units. He believed those to be average prices. A link from NewCondoReality showed prices and numbers of units to be as follows: