Our first auction where we were actually bidding. Some guy started the bidding at $700k and then it went up in increments of $25k. It stalled around $825k. Then I bid $830k. The next bid was $835k. But even $830k was above our predetermined limit. I only bid it because I knew the price was still below the reserve and if bidding really had dried up I wanted to be the top bidder to negotiate. But that seemed to unstick things and eventually the house sold for $877,500. Looks like the reserve was $875k. I was surprised that it actually sold at auction as the two previous houses that sold for $870k in that neighborhood would have standard valuations that would be higher. I guess the atmosphere on that block feels more like you are out in the bush and maybe that is what people wanted to pay for. It's what attracted us.
One of the agents would go around talking to bidders during the auction trying to get them to up their bids. When he asked me at around $875k I said: "That's the most we could possibly afford and it's way over the valuation we got, so no". He said: "They were wrong". I think it is highly likely that official land values for tax purposes will go up steeply in this neighborhood after these recent sales. But at the end of the auction, the agent shook my hand and said: "Congratulations". That was weird. Did he really think it wasn't worth $877.5k or did he know something else? A neighbor standing behind us then made some cryptic comments about the other neighbors. Snork Maiden thinks he was saying they were bad. I just couldn't understand what he was talking about.
Our attention now turns to a house in a neighborhood nearer us. It's land is valued $200k more than this one. It has a great view of the city and hills. The house is smaller and not in as good condition. Maybe a better chance to get a deal. There are lots of blocks in this value range that I really think are not worth paying for. This one maybe is.
A couple of colleagues came along to the auction. They hadn't been to a house auction before. One said: "These are like Santa Barbara prices". That's almost right.