Minimum Bids Open the Doors : Antelope Valley: Buyers get ‘steals’ at HUD foreclosure auction. But no offers are made on 21 of the 87 residences.

Even at fire-sale prices, the federal government’s housing agency had trouble selling 87 foreclosed houses that went on the auction block Friday in the Antelope Valley.

In the largest such Los Angeles-area auction conducted by the federal Housing and Urban Development Department in years, some buyers walked away with steals and others struggled with the pitfalls of foreclosure buying.

But many attending the three-hour session in Palmdale simply sat on the sidelines, leaving the federal agency with no bids at all on nearly a quarter of the houses.

In one success story, Palmdale real estate agent Connie Scheidt grabbed a two-bedroom condo in Lancaster for her newly married son for just over $40,000, the lowest price of the day. Scheidt said her married son couldn’t afford any more than that, adding that the owners of a similar condo in the same complex have their unit for sale at $61,500.

But bargain hunters learned there were risks, too. One buyer balked at buying a three-bedroom Lake Los Angeles house for just over $50,000 after learning there might be thousands of old car tires buried in the back yard. HUD officials gave him a week to explore the property and think it over.

Even those houses that interested the several hundred real estate agents present for the auction drew winning bids that were often barely above HUD’s minimum prices, starting at $30,000 and ranging up to $95,000. Normal resale home prices for the area recently have been between $100,000 and $150,000.

“I was very surprised at that,” sighed Joe Lagerbauer, director of housing management for HUD’s Los Angeles office, which conducted the auction. “The market was a little less than even I expected.”

By the end of the auction, no bidders had surfaced for 21 of the 87 houses.

Although HUD has held two smaller housing auctions in the Los Angeles area in recent years, officials said Friday’s Antelope Valley session was the largest thus far, mainly because of the growing numbers of foreclosures on federally insured mortgages and weak sales.

But HUD officials predicted there will be more auctions in the Antelope Valley. The region accounts for many of the 464 Los Angeles County homes currently in HUD’s foreclosure inventory, a total that has risen from about 160 countywide less than two years ago, officials said.

Many of the HUD homes are in the Antelope Valley because prices there have been low enough for buyers to utilize Federal Housing Administration-insured mortgages, which top out at about $124,000, Lagerbauer said. Houses elsewhere often are too expensive to qualify for those popular loans.

For Bob Schack, the manager of Stewart Title company in Palmdale and an active figure in the local development community, the day was both a blessing and a curse. Schack said the auction’s typical selling prices of between $50,000 and $85,000 were the area’s lowest for buyers since the mid-1980s.

But until the foreclosure homes and other cut-rate properties available because of the recession are all sold, their low prices will continue to drag down the rest of the area’s housing market. “There’s some tremendous buys now for those who can buy. But we’ve got to get through them. This is terrible,” he said.

Mark Khan, owner of the Help-U-Sell real estate office in Palmdale, went away happy, picking up a four-bedroom, two-bath house in Lake Los Angeles for just $52,220. He said its buyers, a renter family from the San Fernando Valley, are getting a house worth $80,000 to $90,000.

The highest-selling price of the day was $113,000 for a four-bedroom, three-bath house in Palmdale that went to a couple renting in Pacoima, represented by John and Connie Rosete of R.R. Gable Realty in Palmdale. The Rosetes said the house’s market value was closer to $120,000.

HUD’s Lagerbauer said his favorite was a four-bedroom, two-bath house in east Palmdale with a stylish interior decor that went to a local realty office for $79,000, just above the minimum asking price of $75,000. “In my opinion, you stole that home,” he told the buyer.

To look at, many of the HUD houses are not impressive. Landscaping often has died because the water and other utilities have been turned off, and some homes fall prey to vandals while they sit vacant. But HUD officials said most simply need cosmetic improvements and simple repairs.

There also is some risk, because HUD provides no warranty for the houses and some have been altered by owners to make them ineligible for federally insured mortgages. But Lagerbauer said there still are deals worth considering. “We’re in Southern California and talking $79,000 for a house. Gee whiz.”