Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Tuesday, May 01, 2007

What If They Gave An Auction And Nobody Came.....Except For The Snacks???


That was the story out in Glen Ellen this last weekend when the Chauvet Hotel Luxury Condos went on the block.
We'd been curious as to how that whole auction business was going to play out. There had been so many plans for the Chauvet property, they all seemed to come and go. I was actually surprised that the condo project got as far as it did. A Bad Sign of course was the idea that the prices had been slashed!, slashed! , slashed! ,Sunday! Sunday! Sunday!
Prices were cut down at least 30% prior to the failed sale. It was starting to sound like a monster truck rally, only with granite counter tops and plasma screen TVs and free food.
As the Sonoma IT put it:

There was a crowd of at least 50 people on hand to eat hors d'oeuvres and sip iced tea, but not a single bidder claimed a reserved auction seat and no one came forth to publicly offer the minimum $820,000 for the cheap- est of six three-bedroom apartments in the historic Glen Ellen hostel.

Hors d'oeuvers and iced tea huh???? For what they wanted for those condos I would have expected a whole lot more food, Crystal and a lapdance....at least. Of course some people did turn up. Who wouldn't turn up to watch a trainwreck in slow motion especially if there was grub!! I'm only sorry we had houseguests last weekend, on second thought I should have taken them down there for breakfast, and a show.



Still, the Chauvet partnership remained optimistic the auction would produce some buyers. San Francisco architect and general partner Larry Paul said in March he would be "shocked" if the Chauvet units didn't sell at auction for the minimum bid prices, that ranged from $820,000 to $895,000.

Paul said then the partnership had invested more than $4.5 million in the project, that "carrying costs have just killed us," but that he fully expected the units to sell. The auction itself, which was advertised worldwide, was an unusual venue for selling luxury real estate. Paul compared it to selling fine art or vintage automobiles. "Nobody has any idea what these things are worth," he said in March, partly because there are no comparable properties nearby to price them against.

Despite the lack of bidders on Saturday, general partner Christine Hansson, also of San Francisco, said she wasn't discouraged. "This was a shot at innovative marketing," she said on Monday. "We didn't come out emptyhanded. There were people there who were interested who didn't want their names in the paper, or the price they were willing to pay publicized. Several parties were extremely serious. We're not dead."


Nope, you're not dead...yet. Even a headless chicken can make it around the yard for a couple of laps before it drops.

11 Comments:

At 5/01/2007 01:06:00 PM , Anonymous Anonymous said...

Even a headless chicken can make it around the yard for a couple of laps before it drops.

And RE prices have Nowhere To Go Except UP! UP! UP! UP! UP!

Another blog had a comment that the smartest step for builders now would be to start up a protection racket -- demanding money from adjacent property owners "Or I put mine on the market for HALF of what you're asking!"

 
At 5/01/2007 01:18:00 PM , Anonymous tom stone said...

Well,if these are nice enough,and you are rich enough $300k for one of the better units might be a reasonable price...I heard a LOT of ads for this auction on the most powerful Bay Area stations,and there were big ads in the PD and sf chronicle as well.They did not stint on the marketing,but the prices... maybe they could sell one of these units to David Lereah at a slight discount,that should assure anyone that the price is right,and that it is a sound investment.

 
At 5/01/2007 02:41:00 PM , Blogger Athena said...

MV we HAVE to go to one of their auctions! You simply must drag me out of the house or office to go! It is a dereliction of duty for us to miss such a stupendous local flop! ;-D

Thanks for taking the driver's seat on the blog! xxxxxxooooooo

 
At 5/01/2007 04:43:00 PM , Blogger moonvalley said...

Athena, a friend of ours did a walk through and my husband wanted to go, but I chickened out..also I forgot. I was looking a few other places during the weekend..all 2 mil +......sheesh!
We definitely must have a bubble party...are you here or down south?

 
At 5/01/2007 04:54:00 PM , Blogger Athena said...

I am officially back up here and transferred to the SillyValley office. So let me know when you are around and we will do some incognito open house flop tours.
:-D

 
At 5/01/2007 05:06:00 PM , Anonymous Anonymous said...

Past experience with farming says the dead chicken will go on for about 10 minutes.

You just have to keep standing them back up when they fall over.

LAEF2

 
At 5/03/2007 05:47:00 PM , Blogger limo_888 said...

I want to buy one, but at a 75% discount. I guess I have to wait for a year or two...

 
At 5/03/2007 05:51:00 PM , Anonymous Anonymous said...

don't you know? Nobody's house is worth less than half a million in Sonoma. Take a look at the mls. Nobody prices their sh#%hole for less than that. No matter the average asking price is 10x the average household income. They won't wake up until the sheriff is putting their crap on the curb.

 
At 5/03/2007 06:54:00 PM , Anonymous tom stone said...

Even if the Toilets were by Lalique',and the Bidet spouted an '81 Iron Horse Brut,these are way overpriced.Even David Lereah discovered the importance of LOCATION.which is the entire point of his last book...i believe he considered it the greatest insight of his years as chief economist of the NAR.It almost seems a shame that he move(d) on so soon after this realization,but perhaps he understtod that any further contribution he could make would pale by comparison.MV let know if you and the Goddess of common sense are going to show,perhaps we could meet there,and have a little fun..."are you SURE the minimum bid is ...??

 
At 5/04/2007 04:49:00 PM , Blogger moonvalley said...

tom...
Even if the Toilets were by Lalique',and the Bidet spouted an '81 Iron Horse Brut,these are way overpriced
Personally I like those bidets by Toto that spit flame, that's gonna feel like a walk in the park after some of these people get done paying the mortgage. When do you think the next auction is? Certainly they'll try try again.

 
At 5/05/2007 10:23:00 PM , Anonymous tom stone said...

MV,i think it will be 6-8 weeks.they have to having some real unpleasant coverstions with their lenders,and between themselves.They spent a LOT of money promoting this auction,and are undoubtedly bleeding cash at a prodigious rate




MV i think it will be 6-8 weeks at least.they have to be having some unpleasant conversations among themselvess,and their lenders.they spent a LOT of money promoting this auction to no avail.they are bleeding cash at a prodigious rate...slashed femoral is the term that comes to mind.I think they have one more chance to unload this Turkey if they slash the prices and the lenders will take the short sale.otherwise it will go to the bank.and that will be fun for for the lawyers,oh boy.at least this wasn't built by lennar,so it will probably still be standing in 10 years.

 

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