Last weekend, one much bruited auction was held here in the Florida Panhandle. Properties offered ranged from luxury condos to vacant tracts of land. One prominent auction house had 15 different properties that went under the gavel.

How many properties sold out of all those offered? Not one.

So I was a bit nonplussed when I opened my email this Monday morning after to find a message from one of the prominent auction firms: “Agents, are you tired of your property not selling?”

The irony was inescapable.

While auctions have had a good run of popularity in the recent market, the fact is that more recent auctions have sorely lacked bidders. What bidders there are have grown very wary, each waiting for the other to bid.

Truth be told, auctions did not consistently deliver value to the Seller even in their recent heyday. One case that we encountered involved a luxury condo that was up for auctioned twice and did not sell on either occasion.  Of course, the auction company does not refund the marketing fee they have collected (ranging typically from about $3,000 to $10,000). The auction did not bring in the required amount, so the property did not sell. In a matter of a few weeks, La Florida sold a condominium that was approximately the same size in the same building. The sales price? Greater than the highest bid on the most recent auction–$1.895 million.

We wonder what will happen to those properties that don’t sell. In the eyes of the market, these unsold properties have been tainted by the abortive auction. The Sellers have significantly narrowed their choices of how to proceed.

It will be interesting to observe if auction companies change their business models to respond to increasingly knowledgeable Buyers and Sellers. Meanwhile, these companies might do well to consider the old saying: “The definition of true insanity is to do the same thing over and over again, and expect different results.”

Debates, caucuses and baby-kissing photo ops are in full swing around the country with “only” a year until presidential elections. Given the way presidential candidates start running immediately after elected (or defeated), it’s hardly surprising that Christmas ornaments are crowding Halloween candy off store shelves.

But to return to politics and its effects on real estate: do you feel that the federal government can take any action that will positively affect the credit and real estate markets? Candidates stump speeches have been long on promises to assist The People, and noticeably short on specific recommendations.

Is the problem that people can’t obtain credit? Or is it that people who obtained credit can’t pay their bills? What can the government do to improve the situation?

The Florida legislature met the deadline to have the tax reform make the January 29, 2008 vote. There were compromises with some highlights below. I have also provided a link with the tax matrix provided by the Florida Association of Realtors (FAR) that summarizes the different tax issues. This is for basic information purposes only. Please seek the advice of your tax professional on how these changes may affect you if passed.

1. Portability: Homestead Owners can transfer their tax saving (up to a $500,000) if upsizing

2. Doubling of the homestead exemption for homes valued more than $75,000

3. Homestead tax increase cap: Lesser of 3% or CPI

4. 10% Non-homestead property tax cap

5. No Fist time homebuyer exemption

This is just a quick overview.

Tax Matrix

We’ve heard all the doom and gloom about the real estate market “contraction” or “relaxation” or “slow-down.” Amidst all the sound-bites and fury, it’s easy to lose sight of some very positive factors that make real estate in our area a great buy:

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