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Brix & Gallery Condo Auction Wrap Up

By Matt Goyer September 27, 2009

Brix, Gallery

Wow, 80 units sold in one day. It was a busy day at the Grand Hyatt!

Brix had all 36 condos sell:

Spreadsheet of the results [xlsx]*
68 minutes
~200 bidders
$344 to $500/sq. ft. Average $409
63% to 81% of “previous list”. Average 70%
$235k to $471k
Redfin stats for Capitol Hill:
- Aug median list: $405k
- Aug median list $/sq. ft.: $418
- Jun sold: 46
- Jun median sold: $336k
- Jun median sold $/sq. ft.: $390

Gallery had all 44 condos sell:

Spreadsheet of the results [xlsx]*
90 minutes
~250 bidders
$309 to $565/sq. ft. Average $439
58% to 81% of “previous list”. Average 68%
$243k to $735k
Redfin stats for Belltown:
- Aug median list: $397k
- Aug median list $/sq. ft.: $491
- Jun sold: 24
- Jun median sold: $358k
- Jun median sold $/sq. ft.: $450

It was surprisingly exhausting watching the two auctions hosted by Accelerated Marketing but it certainly was entertaining. They started both auctions off with an introduction, a drawing for a 42″ TV, and a sample auction.

While the auctioneer was certainly fast talking (I’ll post a video tomorrow), the auction process went pretty smoothly. However, there were a few “glitches”, that they handled well; someone got confused about which unit they were bidding one, a few people got confused about the price, etc.

…By the end of each auction attendance had really dwindled as folks took off after their unit(s) of interest sold for more than they wanted.

The highlight for me was when part way through the Brix auction when some guy won they jumped up and cheered. Sadly, every other winner was much more reserved.

Overall everyone I talked to thought the units sold for a lot more than they expected. Though looking at the results some folks did get a good deal. I suspect Schnizter will be very happy with how things turned out.

Alrighty, who’s going to auction next?

*Big thanks to Corey, Chelsea, Earnest and Dave at Redfin Seattle who were a big help in assembling the spreadsheet.

Update: More coverage at:

Brix Auction Results 30% Average Discount – Good discussion in the comments
Did the Brix and Gallery Auction Buyers Get a Good Deal?
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18 responses to “Brix & Gallery Condo Auction Wrap Up”

scottforcier says:

September 28, 2009 at 12:17 am

Marcato in Tacoma on Oct 17th.
bcg says:

September 28, 2009 at 9:54 am

Your Redfin stats may not be so usefull. You simply can't average/compare $/sf between a unit that looks at Puget Sound or say the Space Needle to one that looks across an alley to the broadside of another building. Also, all solds/listed prices considered are for any building built in any era. A modern bulding with amenities like a gym, guest suite and common areas will fetch more. In fact most buyers with that in mind will not even look at a building that doesn't fit that mold. If you look closely at the auction results you'll find the units that had the best exposures went for an average of $515/sf (at the Gallery.) This is just a bit over average of searches that I have performed for buildings year 2000 or newer with like view in the Belltown area ($511/sf.)

I would say Schnitzer did well and our Condo market may be stabilizing.
K_E_Z says:

September 28, 2009 at 9:54 am

I thought it was shifty that Gallery added unit #820 one day before the auction, not giving people adequate time to view the unit. #1020 is an amazing unit. The two units share a floorplan, but that's about it. #820 has a blocked view from both bedrooms. The new owner will be staring at a big structure (bump-out for a stairwell) a few feet in front of their window. #1020 sold for $735K. #820 sold for $592K. I just hope the new owner of unit #820 knew what they were buying.
rossjordan says:

September 28, 2009 at 10:47 am

Sounds like prices are up ever slightly from the ~35-40% off peak prices that Queen Anne HS, REDC and some other projects were selling for last spring (though that may have more to do with the locations of these projects).
Kevin says:

September 28, 2009 at 12:54 pm

I was at the auction and I think I figured out how the auction is “arranged”.

(1) They did a great marketing (by repeatedly telling people only 60 – 70 people registered to bid) so that about 600 people showed up for each auction.

(2) The price is increased at a pace of 25K, 10K, 5K, 1K in decreasingly order. If no one takes 25K incremental, then the auctioneer goes to 10K incrementals.

(3) Before both auctions the auctioneer repeatedly stressed that you are only outbid by at most 1K by your competitor so people should take advantage of that.

(4) Here comes the gist: there are a couple of auctioner's “friends” sitting among us, those people jacks up the price by offering 25K incrementals, so a 295K starting price quickly becomes 445K. Because people don't want to lose out by 1K, they are tricked into offering 5K / 1K incrementals.

(5) The best units are first to be auctioned, so after a few crazy biddings, the price has been established (60+% increase over startng bid for good units). And 600 people in a crowded room really went crazy. Also the person bought 1020 in Gallery is clearly fake.

(6) I am not saying all buyers are screwed by the auction, maybe they entered the market at the exact bottom. But I think I will be very skeptical if anyone tells me that there are deals to have in those auctions again.
danlong78 says:

September 28, 2009 at 1:32 pm

Shill bidding is pretty serious accusation, and from what I can tell by your post it's based purely on your assumptions.
Kevin says:

September 28, 2009 at 1:47 pm

Danlong78,

It's not based on my assumptions, it's based on my observations. There is a big difference between the two. If you don't agree with me, it's absolutely 100% Ok, I just would like to offer a participant's point of view at this.

Please also notice that the winning bidder offered his bidding price at his sole discretions so if anyone overpaid, he/she can only blame themselves. The same logic applied that I can blame no one if Gallery's price shot up 50% in the next 2 years.
finntheFinn says:

September 28, 2009 at 2:03 pm

Expect it to be a much messier auction & no free TV. The guys who did the auction at Lumen are on it & those were record low prices even for that place.
finntheFinn says:

September 28, 2009 at 2:08 pm

On who's next to go, I think it has to be Escala & Olive 8. It would be healthy to clear the deck of all the dead wood, even if it means extreme deals for some lucky buyers. How can these two behemoths pretend they're having a great go at it when they don't have any presence in the market & apparently no sales whatsoever? they say they won't lower prices to find the market- what other option is there? I'd like to see it get back to normal but until there's a reckoning we're all fucked.
rossjordan says:

September 28, 2009 at 2:26 pm

If you read the (extremely one sided) terms for the REDC housing auctions, they specifically note that they can use agents to increase the price. I don't know about this Brix auction, but shill bidding seems to be at least somewhat common in the housing auction industry.
Steve says:

September 28, 2009 at 5:42 pm

I was at the Gallery auction, and I can't say if there were shills or not. I know one guy who may have overpaid for a unit early on, and he was no shill (perhaps he got shilled, though?). I found it interesting that they passed out cards after the auction for people that would be interesting in buying any units in the event that the sale does not go through. Perhaps that's normal, or perhaps that what you do if you have “agents” in the room. I would be interested in a follow-up in a month to see how many of the units actually changed hands from Schnitzer to auction winner.

Overall, I thought the prices were high; I went with the idea that the units would go for 10-20% less.

I also hope that the 820 buyer knew what they got. One really needed to pick apart each unit and not make assumptions based on floorplan.
Strike says:

September 28, 2009 at 11:33 pm

Shill bidding is common at real estate auctions, and it's perfectly legal in many states. Here's a recent guide on how to spot it.

http://activerain.com/blogsview/1021608/secrets…

It is possible to setup the auction room so it can't easily be spotted, by limiting access, prohibiting use of cameras etc.
menace2200 says:

September 29, 2009 at 1:43 pm

The auction group did a great job for the developer. They created enough excitement that many buyers simply paid way more than the home was worth. This statement is compounded by the fact that there is still risk with the building not being sold out. With nearly half the building unsold, there could be more downside leaving these auction buyers with negative equity.
asher says:

October 1, 2009 at 9:51 am

Anyone who looked at the books for Gallery would see the HOA already has $130k in unpaid feeds.
joel13 says:

October 1, 2009 at 12:16 pm

Asher. Did you look at the books? If yes, did they explain the current set up for the HOA? My understanding is the building hasn't been handed over from the developer yet. No-one is paying HOA fees yet and the developer is paying for the running of the building. Under this set up, there can't be any “fees” owing. Either the developer is paying running costs or it isn't.
dildough says:

October 12, 2009 at 1:57 am

I didnt look at anyone's books and I wasn't at the auction. I've seen the Brix. Its a very average building with another condo going up across the street that will block all western dusk light and views. It doesnt take a genius to know anyone who buys a condo for over 250k in that building got hosed. It is on Broadway, a fairly entertaining pedestrian option, although the southern end would be more fun, thoguh less quiet. Volunteer is real close to the Brix and its a well-patrolled area, so criminals won't find it a good place to hang. A good location, I will give it that, but nothing special about that building. Besides, economic armageddon is still in the cards. Commercial real estate is tanking. People need to get the smoke out of their eyes. This market has not recovered because the economy has not recovered. Finally, I found a blog with some honest talk about condos in Seattle. It is really tough info to find…
nsr says:

October 13, 2009 at 11:52 pm

I looked at the Gallery books and saw the same thing. This is the financial document I examined, titled Gallery Belltown Treasurer's Report for month ending July 31, 2009

As of July 31, 2009, operating cash totaled $10,692, unpaid assessments (receivables) totaled $136,758, and other cash (or cash equivalents) totaled $82,835, for total assets of $230,285.

You tell me what it means. My initial take was the HOA is six figures in debt already.
nsr says:

October 14, 2009 at 6:52 am

I looked at the Gallery books and saw the same thing. This is the financial document I examined, titled Gallery Belltown Treasurer's Report for month ending July 31, 2009

As of July 31, 2009, operating cash totaled $10,692, unpaid assessments (receivables) totaled $136,758, and other cash (or cash equivalents) totaled $82,835, for total assets of $230,285.

You tell me what it means. My initial take was the HOA is six figures in debt already.

Brix & Gallery Condo Auction Wrap Up

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