iBidCondo in action…
[youtube = http://www.youtube.com/watch?v=lSLO3i2jmX4]
The first iBidCondo auction was held last night. The result was a high bid for the right to purchase a condo originally priced at $690,000 at the Star Riverside – located on I35 and Riverside Dr and planned to be complete in 18 months – for $87,000.
Watching the video above, the process is just too anonymous for me to get comfortable with. At the recent Brazos Place auction there were hundreds of real people in attendance. You had an existing building. You could see the person that won each auction. The market clearing price for Brazos Place’s 19 downtown Austin condos was $282 per foot. The auction company was not affiliated with the developer.
From the iBidCondo FAQ:
“A selection of the properties listed on iBidcondo are being developed by Constellation Property Group. Constellation Property Group is an affiliate of iBidcondo.”
Constellation Property Group is the developer of Star Riverside condos. Constellation Property Group is also listed as the registrant contact for the domain iBidCondo.com. It appears CPG is more than just an affiliate.
Was this a real auction? Or, was this was a cunning loss-leader for Constellation Property Group?
I suspect there will be a couple of people that will “win” these “auctions” and have the right to close on the units for highest bid once the building is complete. In my opinion, the risk of Constellation not completing construction is real and iBidCondo only serves to further that concern. Constellation wouldn’t sell every unit like this and still expect a return on investment of construction dollars.
Paul D’arcy has an interesting write up at Austin Towers and DAB will continue with updates as I learn more.