Empty Seaside Condos May Become Bargains : Auction to Be Held for San Francisco Units Unsold Because of High Prices, Mortgage Rates
Plush seaside condominiums, once scorned by buyers, are now jammed with bargain hunters and are on the auction block, with minimum bids starting at $64,000--half the original price.
The Ocean Beach complex had almost everything when its 152 units, priced from $128,000 to $525,000, were first offered in October 1982--gorgeous views of Pacific sunsets, Seal Rock jutting from the water and miles of sand a few steps away.
It had octagonal living rooms with fireplaces, large glass windows, huge tubs, electric kitchens, sophisticated styling and a feeling of freedom just minutes from downtown.
It had everything, that is, except people.
Rate Squeeze
High prices and mortgage rates put a squeeze on potential buyers, and developers who thought the apartments would be a big hit were stuck with empty units in their three, three-story buildings.
Only 26 condos sold, 83 stayed empty and 43 still haven’t been completed. Ocean Beach Associates, the developers, went out of business after deeding the unsold apartments, priced at $24 million, to Crocker Bank.
Now, with the help of a fresh coat of green paint sprayed on the brown grass, flowers in the skylighted hallways, and a $150,000 advertising blitz in 20 newspapers, the condos may soon be filling up.
An auction has been set for Saturday, with minimum bids slashed 50% from original asking prices. The housing sale attracted some 1,000 possible buyers who came to view the condos in the first two days of a campaign kicked off by a full-page ad in the Wall Street Journal.
Housing Shortage
In a city with a housing shortage and real estate among the most expensive in the nation, many people say there are bargains here.
“These are a steal, if you can get them at minimum bid,” said Derek Horanzy, 23, who visited with his mother. Both said they intend to make bids on different apartments. “Once they get filled up, the prices are going to skyrocket,” he said.
Horanzy criticized some of the designs, such as bath areas with no doors, small bedrooms, wood veneer cabinets, tiny spaces for washer-dryers and metal corroded by salt air, but said he loved the “humongous” balconies overlooking the beach.
Minimum bid prices range from $64,000 for a one-bedroom unit facing a supermarket instead of the beach, to $262,000 for a two-bedroom penthouse with a den and two fireplaces. Five financing plans offer mortgages with annual percentage rates ranging from 11.81% to 12.58%.
“I think it will be a success story but you never really know until the day of the auction when people speak with their checkbooks,” said Darrell Hoover, president of R. Thomas Ashley, the real estate auction firm running the sale.
