The auctioneer probably felt that he was on a roll. The first three properties up for auction from the Philadelphia Housing Authority stock had drawn bids of more than $100,000. One had gone as high as $175,000.
Even I was impressed. Buoyed with confidence, he started the fourth property at $150,000. No takers. $100,000. Silence, even though his assistants on the floor tried to rev up the energy among bidders. $50,000, $25,000, $20,000, $15,000, $10,000, and finally $5,000. Then the bidders woke up from their slumber and someone raised a bid card.
The auctioneer apparently forget that age-old real-estate adage: Location, location, location. While the first three pieces of property were in a very desirable neighborhood of upper-crust row houses and townhouses, property #4 was not. It sold for $10,000.
It took two more property sales before he realized that he was in a different zip code, and had to drop the starting price accordingly. For the next hour, most of the properties started at $5,000 and never got above $31,000 – with most considerably less.
The housing authority had 92 single properties for sale at this auction, the second in a month. The first auction held in mid-November included 400 houses, lots and other properties. Some of them were singles, but most were bundled into multiples. Those sold from $17,000 to $1.2 million, according to one news account.
The authority was selling off the houses to fight blight in local Philadelphia communities and to privatize the properties, according to a story in my local newspaper. These auctions were the first sponsored by the housing authority. The agency owns about 3,300 vacant properties and got permission from the U.S. Department of Housing and Urban development to get rid of some of them, either through nonprofit organizations or by selling at market value.
None of the properties at the first sale were in move-in condition. But that didn’t seem to bother the 500 people who showed up then and the 300 or so – from my early count – who turned out on a rainy day for this one. The huge ballroom was partly filled, with some people propped against the back wall or standing, although there were empty seats all around. A two-man guitar combo played gentle and relaxing mood music, and assistants worked the room introducing themselves and inviting questions.
Before the auction, a potential bidder two rows in front of me stopped one assistant as he walked by. “Absolutely, you’ll get a clear title,” the assistant said in response to a question I did not hear. Behind me another man said, “They went crazy the last time,” adding that he didn’t buy anything because the bids were so high. This time, on the auction list, he had used a red pen to block out three properties in what looked like good zip codes.
When the auction began, several of the assistants bounced around the room like evangelists, shouting out when a bid card was raised. One assistant held her arms open like a worshipper in supplication. Another was actually doing a little jig. They made for a festive atmosphere – a tactic, I assume, to get people warm and cuddly and open to bidding.
The auction was conducted by Max Spann Real Estate & Auction, which, according to owner Max Sr., had been around in some form since 1895. His grandfather started it, he said, importing cows from the Isle of Jersey (off the coast of France and for which the state of New Jersey was named) that were sold at auction. Max Sr. has been in the business for 50 years, but he started out as a farmer raising cows and crops, which he still does, he said.
With this auction, he said, “we’re getting people together. By doing this, they determine the value of the market.”
He’s right, and that’s the case with any auction. Not only do bidders determine the value based on how bad they want the item, but they set the value for that particular period in time. Tomorrow, the item – or in this case, the property – could be worth more or less.
The housing authority’s properties were scattered throughout the city. All were sold as it, and buyers had to pay a 10 percent premium or $200, whichever was greater.
I wasn’t around for the entire auction so I’m not sure what the highest price was paid for any property. As I looked around the room, some of the bidders seemed to be people looking for a home of their own, like the couple who paid $7,000 for a property.
- This house sold for $31,000 at the auction of public housing properties.
I left the auction early to check out a few of the spots: two south and close to the downtown area or Center City, as it is called, and one farther north. When I came to the location where the first should have been in South Philadelphia, I looked for the house number, but couldn’t find one. It was on a block of new and renovated townhouses. Then I noticed a lot with cars parked on it, and realized that someone has paid $170,000 for a property not a house.
Not too far away was the second location, again an empty lot enclosed by a fence with a thriving green vine growing over it. A light-pole banner advertised “Marian Anderson Heritage Village,” with a link to the website of the group that manages a nonprofit organization in memory of the famed singer. This, too, was a very desirable street with one house bearing a “Sold” sign and another with a “For Sale” sign. This parcel went for $175,000.
The northern property had drawn a lot of interest in the bidding. It was in a less-stellar neighborhood and was one of those old big row houses made of tan brick on a well-tended street. Its windows were boarded. It had sold for $31,000.
