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Letter to the editor

Glitter under the gavel

You know the market's bad when a Sotheby's auction can't sell a mansion for half price.

By JAMES THORNER, Times Staff Writer
Published November 17, 2007

This home on Longboat Key at 5060 Gulf of Mexico Drive, Sarasota, originally listed for $11.9 million. It's 5 bedrooms, 6 baths and about 11,000 sqarre feet.
	[Handout photo]

SARASOTA - Selling a home these days is tough. Some people try warm cookies and helium balloons. Others give away free washers and dryers.

But what if you own million-dollar properties? The kind where you don't ask about a mortgage because there is no mortgage?

Here's the answer from a luxury real estate auction held in Sarasota Friday by SKY Sotheby's International Realty: If you want to move waterfront mansions in a hurry, it's best to settle for 40 cents to 70 cents on the dollar.

"The current market has been dysfunctional," said SKY president Chad Roffers, whose company offered up 79 homes worth about $200-million in a giant lawn tent at the private Long Boat Key Club.

"Homeowners learned what fair market value is. We had 400 buyers from four countries and 18 states. The market was here."

Homeowners also learned the limits of auctions, a method gaining favor this year to provide an amphetamine rush to a slumbering market.

About 30 of the 79 properties sold on Friday. Some were auctioned, but required a minimum bid, while others were sold "absolute" - best offer takes the property.

While Roffers proclaimed the day a triumph, none of the three Pinellas and Hillsborough County properties on the block ever passed Go. One 5,200-square-foot waterfront house at 6161 51st St. in Bayway Isles in St. Petersburg, originally listed for sale at $2.4-million, couldn't rustle up a minimum $800,000 bid.

Another of the higher-end waterfront properties, listed at $11.9-million on Longboat Key's Gulf of Mexico Drive, also failed to sell.

Considering their ability to toss around tens of millions of dollars, many of the buyers were a secretive lot. Participants paid a $10,000 deposit just to win use of a blue bidder's paddle. If they won, they had to write a check for 10 percent of the purchase price on the spot.

"It's the aftermath of irrational exuberance," said one anonymous millionaire with a British accent from Southeast Asia who - no doubt enjoying the weak U.S. dollar bargain effect for foreign buyers - scooped up four properties for about half their recent value.

His son chimed in: "This is a market wake-up call. Forty to 50 cents on the dollar: I think this is the new reality."

Despite the bargains, the auction set a record for a single home sale in Sarasota. It was the $14-million sale of an estate called Sugar Bay on Casey Key. The castle-like mansion was built of imported South American coral stone and came with a guest house and 200 feet of beach. But even that was originally listed for $20-million.

Trophy homes like Sugar Bay, those with special locations and attributes, outperformed. Another such winner was a three-story Georgian mansion of 11,000 square feet in Osprey. A bidding war erupted over the house, which sold for $6-million.

The losing bidder had been eyeing the house for two years, but never pulled the trigger on a deal.

"That one I really wanted. It's just bad luck," he said, hugged his friends goodbye and tossed his bidder's paddle in the trash.

Auctioneer Daniel DeCaro, who's done 40 luxury real estate auctions so far this year, mostly in Florida's hard-pressed market, spent most of the four-hour auction trying to flog interest in the properties that didn't sell.

A house in Apollo Beach's MiraBay was one such no-sell. It was originally listed for $1.25-million but couldn't attract an acceptable opening bid.

"Five hundred!" DeCaro bellowed from the stage in the auction tent, seeking half-a-million dollars for the MiraBay. "Four hundred to get it started? Four hundred, anybody?"

By the end of the auction, interest had waned to a trickle. No-sale followed no-sale. Blue bottles of Saratoga spring water littered the floor along with glossy auction booklets.

"Looks like there's a lot of money in this auditorium," DeCaro told a dwindling crowd. "But you guys aren't spending it."

Millionaires who didn't land the home of their dreams could have snagged a consolation prize outside the auction tent. Actor Nicholas Cage's black Ferrari convertible was up for charity auction. Anyone for a minimum opening bid of $315,000?

James Thorner can be reached at thorner@sptimes.com or 813 226-3313. Read his (Un)Real Estate blog at blogs.tampabay.com/realestate/

[Last modified November 16, 2007, 23:00:25]