A dozen couples, families, young singles
– even a Gilroy City Councilman – walked away with as many homes
Sunday afternoon after South County Housing held an auction to
breathe financial life into its downtown housing project.
A dozen couples, families, young singles – even a Gilroy City Councilman – walked away with as many homes Sunday afternoon after South County Housing held an auction to breathe financial life into its downtown housing project.
A crowd-pleasing auctioneer coached and humored 51 mostly amateur bidders who packed a conference room at the Doubletree Hotel in San Jose. Each round of bidding usually expired after about five minutes, with the top bidders quietly raising each other by a thousand dollars until the final, “Sold!” The average sale price was about 10 percent above SCH’s minimum.
“Come on, we can be here all day. It’s up to you,” joked Ken Cullum, the auctioneer, during one of the first auctions that lost steam early on.
“$410,000 – I got you cheap. This is a good home here,” said one of the spotters who combed the aisles, eyeing the crowd for a yellow bidding card to shoot up so they could yell, “Aye!”
While SCH would have liked to hear more “Ayes,” selling 12 units in today’s housing market is no easy chore, said Ken Stevens, founder and CEO of Accelerated Marketing Partners, which conducted the auction on the nonprofit housing builder’s behalf.
“We sold one year’s worth of inventory in less than an hour in the toughest real estate market this country’s seen in 20 years,” said Stevens, who added that Sunday’s auction compared nicely with one AMP held for a Morgan Hill developer last February. “Relative to today’s market, today was terrific.”
SCH President and CEO Dennis Lalor agreed and said the nonprofit will continue developing the partially built second phase of its three-phase, 210-unit downtown Cannery project, the majority of which includes affordable housing. As for the remaining 12 units at Forest Park that were either unavailable to bidders or simply did not fetch a buyer, Lalor said SCH will sell them conventionally.
“We understand that the bidders came out and set the values for these homes,” Lalor said, but he added that auction prices are often low, so conventional buyers should not expect the same. Lalor and Stevens also said they expect couples who spent Sunday night kicking themselves for not buying houses to return to the Gilroy sale office to salvage missed deals.
Kym Good was one such deal-getter.
For $344,000, she bought her first home: a nearly 1,400-square-foot, three-bedroom, two-and-a-half bath townhome. It was not her first choice, she said, but other bidders surpassed her $350,000 ceiling by just a few thousand dollars on the other townhomes she wanted.
“Now that the nausea’s passed, I feel fine,” Good said before texting her mother about her purchase.
These values amazed Good’s brother, Councilman Perry Woodward. He bought a five-bedroom, 2,400-square-foot single-family home with his wife, Rochelle, for $487,000. An identical house down from Woodward’s sold last August for $680,000, according to WhoBoughtWhat.com.
“I’m surprised that a townhome in downtown Gilroy can go for less than $350,000,” Perry Woodward said as his wife signed papers for the house the couple said they will rent. “I wasn’t planning on bidding if the price exceeded the minimum by 10 percent.”
Perry and Rochelle Woodward added that they were surprised when they showed up and saw that the list of available homes up for auction had shrunk by 13 units. Lalor said this was due to the 69 pre-approved bidders’ expressed preferences: They each spent various amounts of time inspecting their ideal homes before assembling a list and an auction game plan – at least, most of them did.
One married couple with a 12-year-old daughter and a 16-year-old son decided to attend the auction after looking at the homes just the day before.
“We decided to come yesterday,” said the wife and mother who has lived in Gilroy since 1987 and declined to give her name because she had yet to tell her landlord they were moving out of their rented house. “I’ve never been to an auction before, but, boy, it went great.”
“It always goes terrific for the buyers,” Stevens said of auctions in general. “The seller’s never happy.”
At the last minute, Lalor and his associates replaced three of the larger townhomes on the auction bloc with three smaller units because bidders went after them more aggressively than others. One of the impromptu additions did not solicit the minimum bid of $355,000, but another sold for $386,000. All the new buyers will pay about $200 a month to the homeowners’ association.
Bankers, builders and concerned residents, such as Gilroy Unified School District Board Member Jaime Rosso, also showed up to see how the Gilroy market would fare. Local solar home builder Chris Cote said the low prices proved good for buyers and also reduced the amount of inventory in Gilroy.
