Area homes snapped up for bargains

Shannon Rasmussen was still out of breath as she left the Westin Seattle ballroom with her mother and real-estate agent. A teacher and recent graduate, she had just placed the winning bid on a new four-bedroom house in Everett for $295,000.

"I'm very excited. It's surreal," Rasmussen said. For less than $300,000, she got a 1,865-square-foot house in a new development that auction organizers say was previously valued at $365,995.

Her agent, Mary Shields of Windermere Mill Creek, was equally giddy, calling it a "great deal" for quality new construction. Homes priced at that point on the conventional market were older and required a lot of maintenance.

"Anything under $300,000 is basically junk" on the regular market, she said.

About 300 people joined Rasmussen on Sunday to pick over 92 homes on the auction block, lured by news coverage and sidewalk signs covering neighborhoods where homes were being auctioned. As housing prices have fallen and sales have slowed, developers are turning to auctions to quickly sell new, non-foreclosure condos, townhouses and houses. The auction sold 62 out of 92 homes for a total of $15.4 million and an average sales price of $248,387.

Real Estate Disposition LLC, a Southern California company, organized the Seattle auction and has conducted others throughout the country.

"Builders come to us because their business, the market, has slowed down," said Rick Weinberg, spokesman for Real Estate Disposition. "It's basically stopped, so they want to sell properties by the end of the year, so they come to us to help them."

At the company's auction earlier this year of 28 condominium units in The 400, a new waterfront condominium project in Bremerton, 17 sold. Bidding opened at $109,000.

There were offers on all 28 units, said Mark Goldberg, chairman of M.S. Cavoad, the Seattle company that developed the condo project. Seventeen offers were accepted, and 11 were rejected because they were too low. Those units became rentals instead.

Goldberg said the auction "was the right thing to do at that time, absolutely. In these economic times, you'd better get creative."

He said the prices on the accepted offers were "very close" to what they hoped to get, but less than the original asking prices.

While Sunday's auction featured new homes from builders, the company does far more auction business in foreclosed properties, selling 23,000 foreclosed homes this year, Weinberg said.

Michael Jackson tunes played in the ballroom Sunday morning as people registered to bid. To qualify as a bidder, attendees had to have a $2,500 cashier's check in hand, photo ID and a personal check for a 3 percent deposit. Three men in tuxedos walked the aisles, noting bids to a motor-mouth auctioneer.

Opening bids ranged from $89,000 for one-bedroom condos in Issaquah to $259,000 for four-bedroom, single-family homes in Tacoma. The auction also featured townhouses in Kittitas County and houses in Lake Stevens and Stanwood.

The first three houses in Everett, including Rasmussen's, opened at less than $200,000 and sold for around $300,000. Two-bedroom townhouses near Cle Elum in Ronald, Kittitas County, opened at bids of about $150,000 and sold for close to $250,000.

The crowd held buyers and the curious, attracted by the auction organizers' prolific street signing from Everett to Fife.

Rabbani Mohammed, who works in the software industry, found out about the auction from a street sign in Issaquah and came to see where the final bids landed. He has owned and sold two condos before a move to the East Coast and back. He is now renting an apartment with his wife and two children, and looking to buy.

"I'm going to see how the market is and make a decision in the next six months," he said. "I think we're going to see prices go down with the job market weakening and the Washington Mutual cuts."

Watching the auction from outside the doors, he held a list of homes on the auction block and noted the final price of each house and the bidding trends.

The first bidder on a set of similar homes, he noticed, tends to pay the highest price.

The least expensive condos, one-bedrooms in Issaquah, sold for as little as $110,000, Mohammed said. He figures at that price, the mortgage payment would cost about the same as rent on an apartment.

He described the current real-estate market as "reality. All the inflated prices are gone."

Seattle Times real-estate reporter Elizabeth Rhodes contributed to this report.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com