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National study finds 264% rise in auctions.

National study finds 264% rise in auctions

For the second consecutive year, a record number of properties were sold by auction, indicating the growing popularity of auctions as the marketing method of choice for home builders, multi-family residential developers, the commercial real estate community and financial institutions.

These findings were reported by the second annual National Real Estate Auction Index compiled by Kennedy-Wilson, Inc., the nation's leading real estate auction-marketing firm at the 50th Annual National Association of Home Builders Conference in Las Vegas, Nevada.

The National Real Estate Auction Index tracks auction marketing programs conducted throughout the United States by Kennedy-Wilson. The firm's clients include the Resolution Trust Company, a number of the nation's largest developers and financial institutions, syndicators, and large industrial corporations.

Nationwide, the Index revealed, real estate auctions increased 264 percent in 1991. Sales posted in 1991 totaled a record $761.6 million, up from $398.5 million in 1990.

"Auction-marketing continues to sweep the nation," said Kennedy-Wilson Chairman Bill McMorrow. "The 4,511 units sold in 1991 versus the 1,811 units sold in 1990 indicate that auctions maximize investment return and are preferred over expensive marketing campaigns which yield minimal results over a long period of time," he added.

California led the nation in auction activity with 63.4 percent of total auctions conducted. The Los Angeles/Ventura region accounted for 40 percent of the state total, followed by Northern California with 27.3 percent.

"Kennedy-Wilson launched its Northern California operations in the last quarter of 1990, and posted an impressive $131.6 million in sales in only three months. The Stockton/Modesto area is especially strong with single family developers turning to auction-marketing to launch new housing tracts," McMorrow said.

The Northeast posted the largest growth in auction activity. Kennedy-Wilson conducted 21 auctions, selling 544 properties in the Northeast corridor in 1991, a 340 percent increase in sales over 1990.

Condominiums/Townhomes returned to the top of the product type list with total sales of $271.9 million, followed by single-family homes with $262.7 million, and commercial/income property with $170.4 million.

Information compiled for the National Real Estate Auction Index includes a geographic and sales analysis of 4,511 properties and various statistical data such as total auction day sales, percent of sales closed at auction, percent of units sold to offered, total sales at auction, and average sales price as a percent of minimum bid.

In the past three years, the firm has sold more than 7,748 properties for a total sales volume of $1.3 billion.
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Title Annotation:property auctions
Publication:Real Estate Weekly
Date:Feb 12, 1992
Words:429
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