Rancho Palos Verdes Property Auction
A new probate sale at 5965 Peacock Ridge Road #201 in Rancho Palos Verdes was listed this week asking $395,000 (way below value). The auction will be held on Sunday, May 20th at 10 a.m. with an open house this Saturday and final views before the auction. We do not see a lot of these auctions in Palos Verdes but perhaps a little history can give you an indication of what results we can expect.
If you read my blog “South Redondo Real Estate Auction Gone Wild,” then you might have an idea of what is to come. As noted in that past blog, not only did the underpriced South Redondo home sell 75% higher but it sold at a price much higher than the actual value.
This past September I bid in an online auction on behalf of my clients for a property in Monte Malaga at 1517 Granvia Altamira in Palos Verdes Estates. Again, another property priced way below value at $975,000. Our analysis had a valued the property around $1,150,000 and it ended up selling for $1,245,000.
After that auction my client stated, “Wow, every property should be sold like this when emotions are high.” I then asked her if she wanted me to run an auction on their house we planned to list that month and I got a firm “No.” Ha!
Last but not least, I attended an auction in 2015 at 2701 Oak Avenue in Manhattan Beach. This was a true developer’s tear down lot that started at $799,000. The high sale on Oak at that time was around $1,300,000 and of course in the frenzy of bidding, this one ended up selling higher at $1,340,000.
Peacock Ridge Analysis
So how would one break down this property? Well, it is tough with only one picture listed so it is important to see the unit in person to make a final analysis. That said, valuation is pretty darn easy as there is a unit pending in the building on the same floor asking $579,000 at 5965 Peacock Ridge #204.
That unit is about 110 sq. ft. larger than our subject auction property and it went to escrow in only seven days. You could reasonably assume it received asking price (or maybe even a bit higher), so basically a condo is worth around $579,000 in that building.
Your variables here are views and condition.
If the views are the same then your final bidding price should be $579,000 less construction costs (to match the pending property) and the sweat equity you would like to earn. It is that simple.
If the views are different then value is completely subjective at that point and therein lies the rub. My guess is with emotions running high, a buyer will set a proper purchase price and get emotional causing them to eliminate most, if not all of their sweat equity budge Obviously, we have seen this demonstrated time and time in the little history lesson earlier.
Past performance is not an indicator of future results. So perhaps show up and take a swing.