THE SELLOUT CROWD AT PALISADE PALMS 
A Florida real-estate developer who bought up 17 condos in the Palisade Palms towers on Galveston’s East Beach at low, low pre-construction prices 5 years ago was finally able to unload 10 of them at an auction earlier this month, taking what he describes as “a 40 percent haircut.“ Mark Shapley tells the HBJ‘s Jennifer Dawson he’s “done in Galveston,” even though he’s still stuck with 3 units in the 287-unit development. (He’d already sold 4 others). Only 50 people showed up to Shapley’s sales event — less than one-tenth of the draw of a June auction where the buildings’ original developer was able to get rid of 27 units. And Shapley sold his units for much less too: from $170,500 for a 1,044 sq.-ft. 2-bedroom to $742,500 for a 2,659-sq.-ft. penthouse. [Houston Business Journal] Photo: Palisade Palms
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The only upside is in 30 years the implosion of these two buildings will be spectacular.
Sucks for this guy, but I’m sure he knew that with (potential) high reward comes high risk.
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I’m speculating but I assume he’s had a few winners in his investing life that make up for the occasional haircut. Guys like this play the odds. You get a few bombs, but you also get a few home runs.
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I have an unusual respect for people that fail spectacularly :)
Question from an amateur:
How do I find out the results of an auction in Harris County (what was sold, what the winning bid was, …)?
Is this info available somewhere or is it more hit or miss?
It was a shame for the seller that the units went for below market value. Recently (in the last 2 months) similar units have sold for more than these auction prices. Typically an auction shows what the market is willing to pay; however, in this case there simply were not enough bidders to establish a market. The buyers who did attend benefited from the lack of participation.
From Melaine:
It was a shame for the seller that the units went for below market value. Recently (in the last 2 months) similar units have sold for more than these auction prices. Typically an auction shows what the market is willing to pay; however, in this case there simply were not enough bidders to establish a market. The buyers who did attend benefited from the lack of participation.
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It may be the lack of interest in Galveston at the moment. Or it may be the growing lack of money at the moment.
NAR now says it will be 2015 before the market “stabilizes” is the word I think they used. So it will be up and down and all around until then.
I think it’s going to go down a little further before the next up.
I beg to differ the market has been holding strong for the last 6 months or so. I am so happy, I have been selling houses left and right. The market will designate the price though, if its too high the home will not show, if too low we will get many offers very quickly. In this case the builder will take a loss of his intended profits, but believe me he still made $$$$ !! There is a huge profit in building homes and even greater profit in highrise condos. The only problem is no banks will lend to build, so this guy had to back his own loans or at least 50% of the loans with his assets. I service the luxury homes in Galveston. God Bless
From texasrealtypros.com:
I beg to differ the market has been holding strong for the last 6 months or so.
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No doubt that explains why one of our “silk stocking” brokers is on television wanting to be everyone’s realtor. Whether they’re looking for a $20,000 home or a $2 million home. A broker who in the “good old days” wouldn’t touch anything under $250,000. Not sure what is out there for $20,000. Whatever it is it’s not something I would buy. Or even show.