Luxury For Auction In Westborough | Bay State Commons development fails to draw interest from buyers
Real estate auctions and foreclosures are inextricably linked in many peoples’ minds, but a stagnant housing market and a faltering economy have led real estate developers to use auctioneers to sell new construction that just isn’t moving.
A case in point: Parkview On The Commons, a 44-unit luxury condominium project that is part of Bay State Commons, the much-heralded downtown Westborough retail project. The developer on the project planned to auction the first 16 of its one- and two-bedroom condos Nov. 26.
Tough Market
The units went on sale last March at prices ranging between $535,000 and $739,000, but none have sold. After the listing on the multiple listing service ended, the prices were reduced to starting in the $300,000s, but that didn’t seem to spark sales.
Only 16 will be sold, with the hopes that with those occupied, it will whet the appetites of other want-to-be home owners. The auction calls for minimum bids of $189,000 and must be accompanied by a $10,000 deposit on auction day. The remainder must be paid within 45 days and there is also a six percent buyer’s premium.
“This is not a distressed sale, the developer did not go bankrupt,” said Paul Talkowski, president of Daniel J. Flynn & Co. Inc. of Quincy, the company handling the auction. “This is a different, more expedient process of selling these condominiums. It’s a way of differentiating yourself in the market from the rest of the properties.”
The sale brings all interested people together on the same day at the same place: the condominium building at 500 Union St.
Talkowski said it has become more common to sell new construction this way, and his company has done several other auctions this year in Acton, Bedford, Canton and Braintree.
“Some have had greater success than others,” he said.
John Savignano, a broker with RE/MAX Executive Realty in Hopkinton, said the lack of sales might be tied more to price.
“The type of unit they were selling, the price point was very aggressive for Westborough for what is a garden-style apartment complex,” Savignano said.
The median price for a condo in Westborough in 2007 was $173,350, according to data compiled by The Warren Group of Boston.
Using an auction to sell new units can be very effective, Savignanon said, with a high-end condo and house project in Clinton using it with pretty good results.
The project he referred to was The Woodlands complex, which has a mix of town houses, villas and some single-family homes. The developer on that project auctioned off almost 50 condominiums in April 2007.
“Development auctions can be a marketing tool to create excitement about the properties,” Savignano said.
Mike Parent, co-owner and broker of Prudential Parent Associates Realtors, with offices in Worcester, Shrewsbury and Westborough, said auctions of new construction are not a new tactic.
“Well, it comes and goes. Every five or 10 years someone will say, ‘Hey, I know, let’s have an auction,’ and an auctioneer and two squirrels show up. No, I don’t think it’s method that will ever achieve lasting success. I kind of see it as an act of desperation.”
Talkowski said the auction of units at Parkview On The Commons “has all the ingredients for success” including quality units, its location in downtown Westborough overlooking a two-acre park and the retail stores that the rest of the development, Bay State Commons, provides.
The retail center is a little more than 50 percent full, according to Jim Robbins, Westborough’s town planner. There is a Roche Bros. supermarket, a Stein Mart discount clothing and home goods store and Ted Turner’s Ted’s Montana Grill restaurant. There is also a Linen N Things, but due to its bankruptcy proceedings and intended liquidation, it’s not clear how much longer it will be there. There are also a number of smaller shops.
The entire project, both condos and retail space, was six years in the making, Robbins said, from planning to construction and cost at least $100 million.
Calls to the developer, Philips International of New York City, were not returned.
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