This is quite different compare to the previous Auction. Most of the Condos auctioned last year were nicely renovated with granite counters, tile and carpet flooring, stainless-steel appliances.
This however is not the ONLY difference with the last year Auction. It looks like J.P.King has a different style than Real Estate Disposition Corporation. Instead of Auctioning separate units from a certain base price, “16 Absolute sales” would mean the following to the Buyers:

• First 16 lots are comprised of ALL THE AVAILABLE CONDOS on the list.
• The highest bidder of the first lot WILL CHOOSE which Condo he likes to pick. This Condo is taken of the list.
• The same for the next 15 lots.
• The seller is committed to sell those Condos for the final bid price.
• For the rest of the Auction – 42 Condo Conversions left on the Auction list will be bid separately and it will be up to the Seller to Accept or Reject final bid price.

Nevertheless, the place seemed to be quite crowded with prospective Buyers and Investors and a brief interaction with one of them revealed the following:

The bids at the Auction are expected to be quite less than last year. The main reason of course is the overall Real Estate market deterioration. However, significant role will play Buyers’ increased difficulty in getting financing for Condo Conversions.

Most likely banks will require at least 40%-50% down payment, so everyone who is pre-qualified at 20% down doesn’t stand a chance. Lately, banks put Luxury Condo Conversions into HIGH RISK category. This statement didn’t sound as a specific to this particular development, Tucson or Arizona, but rather as a general observation or insider’s knowledge. After all, how much Real Estate market in Tucson is different than in Phoenix, San Diego, Las Vegas, and Miami? Each market has its own specifics, but all of them got overbuild, over-converted, overpriced… Now they are full of short sales, foreclosures, auctions. Though, some might rightfully argue that Tucson is in better situation than other mentioned places.

Nevertheless, banks are especially cautious right now about lending money to the troubled areas. And Catalina Foothills’ Luxury Condominiums community – Villas at Sabino Canyon – is definitely one of them. At the first auction Condos were selling at about 50% discount… Most of the current owners are “upside down” on the property… Over 50% of the units are rentals… Special Assessment might be needed to boost HOA funding…

If all this doesn’t scare you and you are well capitalized to take a gamble, do your due diligence and come to the Auction. Bare in mind that the last few paragraphs are based on what we heard from the investor who already owns a few Condos in the Villas at Sabino Canyon and will probably acquire more.

Out of 40 Condos presented, first two were bid up the most – both to $160,000. This however was the highest point of the auction. Steadily, the activity was drying up, with a few investors picking up handful of units that nobody else really wanted. The price ranged in between $122,500 and $145,000, though it is hard to pinpoint what was affecting the difference. Out of the five 3 BR Units (1,209 square feet each), the only upgraded one was sold for $160,000 (one of the above mentioned first two), the rest end up with the following prices: $140,000, $140,000, $135,000, $130,000 in the auction’s order.

During the auction, nine of the units came back (one of them twice), probably due to bidders’ inability to qualify or lack of the necessary paperwork / money. Overall, that cost the developer extra $52,500, as the consequent bids were lower in eight instances. For example, 2 BR/2 BA Unit 9-105 (1,017 square feet), described as “upgraded, private location, corner unit, fireplace” (auction sequence #22) was at first sold for $140,000. Yet, after it was re-auctioned, the final bid was $125,000.

Most of the vacant units were already completely renovated and upgraded by the developer and included granite counter tops, tiles in the kitchen, bathrooms and living area, new carpet in the bedrooms, new stainless steel appliances, bathtubs, sinks, etc… Two models even included flat screen plasma TV attached to the wall.

Overall, the auction was an amazing experience, worth even just to hear 120-125-120-125-125-125-120-125-120-125… with the speed of 120 words per minute or faster. It was though surprising for me to see starting bids of $89,000-$109,000 going up to $120,000-$125,000 almost immediately and then abruptly stop right there. Why wouldn’t the bidders get up there slowly? It might have saved them “a few bucks” at least in a few cases. However, looking at the face of the person opening the auction, one can strongly suspect that results didn’t meet Seller’s / Auctioneers’ expectations. Only time will show if this auction was a great buy for the investors or a timely escape for the Seller.

One thing is obvious. Those who were buying Condos to live in it have definitely won. They paid half of what was paid by their future neighbors just a few months prior. The location is definitely superior, considering proximity to Sabino Canyon, Ventana Golf and Racquet Club, Canyon Ranch Resort, etc… Moreover, those upgraded luxury condos are in the desirable by many School District 16, yet the new auction prices were still slightly better than many recently sold older non-upgraded condos in the TUSD school district. It was also much easier and safer process than buying short sales and foreclosures.

Good luck to those who won. Enjoy your new home!