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August 28, 2009

Patterson Park auctions: bellwether?

A dozen rowhomes were auctioned off Thursday in and around the Patterson Park neighborhood. That's particularly noteworthy because they belonged to the Patterson Park Community Development Corp., a nonprofit group that was the driving force in that neighborhood's revitalization but fell victim to the housing slump. It filed for bankruptcy protection in February.

More about that in today's story. But the auctions -- held back-to-back from 10 a.m. to 1 p.m. -- are worth paying attention to even if you're not interested in Patterson Park. They're a sign of change, and not only since the bubble days.

The average price was $70,000. I thought "ouch," because they'd been refinanced for $110,000 on average in early 2007. But auctioneer Daniel Billig with A.J. Billig & Co. said it was about 30 percent more than his company had been expecting.

Nine months ago, he said, investors "weren't even coming to the auctions. I had some really great properties that I either didn't sell or I had a very tough time. I would say since the beginning of May, we've gotten progressively better. Better results, better turnout."

Posted by Jamie Smith Hopkins at 6:51 AM | | Comments (7)
Categories: Auctions
        

Comments

$70k is a high price for shells there, I'd think. But the story says these places were "renovated." At the peak, PPCDC's renovations were going for $300k and up. So if these are renovated units they're 75 percent off. You were there: are these renovated? And if so, how's $70k cash sales, mostly to a volume landlord neighbors are leery of, good news?

The Patterson Park CDC did two sorts of renovations: decent ones for rentals and the complete gut rehabs that sold for $300,000 and up. These 12 were the renovation-for-rental type.

I can't answer your other question because I hardly ever say anything is good news. (First off, it's a judgment call. And even if something appears to be good news for most people, it's often bad news for some people.)

In this particular case, I included Daniel Billig's comments purely because I thought folks would be interested in the change he sees.

Edward,

The homes weren't renovated. The CDC was holding onto these properties as rentals. Most of these properties were located on more transitional blocks, so they were sitting on them- with the expectation that development would spread to these areas (with the Potomac St and Decker Ave properties being the exception). This link will give you a better idea of the condition of the properties.

MCG, Ed Rutkowski of the CDC said they were renovated. I went inside some of them yesterday, and it looked to me like they had been -- just not the top-to-bottom rehabs that CDC buyers got. Many of the CDC's purchases were homes in bad condition, so it's not surprising that the group would need to renovate before renting.

Thanks all. It always amused me how granite counters, hardwood floors and tiled bathrooms (a $6,000 value--price it out yourself at Lowes) turned $30,000 houses into $300,000 houses, while mere laminate counters, carpets and fiberglass tub surrounds ($2500 less than the grand stuff) left these houses mere "rentals," now worth $70k on average.

A whole lot of houses they hoped would end up owner-occupied are now back in the hands of a guy who owns lots of houses and lives off his rents? That's the point where a wave broke. I hope it doesn't turn out to be a bellwether.

These homes already were rentals, though. The key is whether, as rentals, they're better, the same or worse for the neighborhood here on out. I know neighborhood leaders are very interested in the answer. (That's one of the points in the story.)

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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