More than 1,500 new and foreclosed homes will go on the auction block in coming weeks in Northern California, as banks and builders try to clear inventory by year's end.
But it's hardly a seasonal trend. All year, auctions have played a growing role in a historic foreclosure crisis.
Auctions still represent a small percentage of bank repossession sales. But since their first major local appearance at Cal Expo in June 2007, they have sold thousands of homes and billions of dollars in real estate. Some home builders have also turned to auctioneers to sell condos or remaining homes in a particular project.
There are more to come.
"The fact is, many people got loans they could not afford in any way," said Rick Weinberg, spokesman for Irvine-based auction giant Real Estate Disposition Corp. "If they're forced out, that house will be on the market and it will go to somebody else."
REDC will hold its fifth auction of 2008 at Cal Expo on Dec. 6. Bidding is to start on 275 homes from the Sacramento and Fairfield metro areas at 9:30 a.m. Other auctions this year have sold condos in Elk Grove and model homes in Woodland and Roseville.
REDC claims 3,156 home sales this year in Sacramento, the Bay Area and the Highway 99 corridor from Stockton to Visalia. Nationally, REDC reports it made 16,454 U.S. home sales this year, already four times last year's 4,103 homes.
In December, REDC will put up for auction 1,288 Northern California homes during a five-day marathon. Leonard Green, a Sacramento real estate broker who works the multiday events, said most bidders are investors, and "a lot of them follow us from town to town."
Two regional auctions are scheduled today.
In San Ramon, Boston-based Accelerated Marketing Partners will auction 150 new homes. Most are in the Bay Area. But bids are also being taken on homes in Copperopolis and a custom ski-in luxury home in Kirkwood. The opening bid for the latter: $2.45 million.
Ken Stevens, the firm's West Coast chief executive officer, said, "Most of our sellers are developers who are trying to appease their banks and pay down their construction loans to a manageable form."
Most buyers, he said, want new houses with builder warranties instead of a bank-owned "as-is" home.
Southern California's Zetabid is also auctioning 80 Sacramento- and Stockton-area bank repos in Stockton today.
Such events have various styles of bidding and fees paid by buyers or sellers. Some have an unpublished price, the minimum a bank will accept. Others declare a minimum bid and accept any amount above it. Some allow online bidding.
"What these really are are bank marketing events," said Sean O'Toole, owner of ForeclosureRadar, a foreclosure tracking firm in Contra Costa County. "The idea is to create excitement and hype around these properties to deliver a better price to the bank than they would get with a traditional sale through a Realtor."
California has seen nearly 275,000 foreclosures since the beginning of 2007, according to MDA DataQuick of La Jolla. Nearly 30,000 have been in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.
Amid such numbers, bank repos dominate home sales throughout California. They accounted for two-thirds of October sales in Sacramento County. That has sent some builders scurrying to auctioneers.
"Most builders look at auctions as a great way to sell a lot of inventory in one day," said Rhett Winchell, president of Kennedy Wilson Auction Group, based in Beverly Hills.
The firm will auction 37 Meadowood Village condos in Dixon on Dec. 14.
"It's been quite a busy year," said Winchell. "We've been all over the U.S."
Prices in Dixon? Bidding starts at $70,000, he said.
Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.


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