GULF SHORESSunday, May 04, 2008 By KATHY JUMPER Real Estate Editor
GULF SHORES, Ala. A driving rainstorm didn't stop bidders from buying 44 condominium units for more than $13 million at an absolute auction that attracted more than 1,000 people to the Crystal Tower condo complex Saturday afternoon.
Amid wall-to-wall umbrellas, more than 500 registered bidders from 20 states came to look for a deal or at least catch a glimpse of the condo-buying fever evident on West Beach in Baldwin County.
The lowest unit sale prices were $275,000 and the highest purchase price was $350,000, which included the 10 percent buyer's premium added to the bid amount, according to the National Auction Co. based in Gadsden.
"My brothers and I had not intended to go that low," said Collier Merrill, the developer of the 170-unit Crystal Tower on West Beach Boulevard. "But we wanted to move some product and in an hour we sold 13 million dollars' worth."
The Merrill family had planned to sell 30 units at absolute auction or with no minimum bid, and instead sold 44. They kept about 20 for rentals, Merrill said.
"Considering the weather, we had a lot of people come out," Merrill said. "There was a lot of buzz about it and it's a nice product with good amenities."
The developer held back about 70 of the 170 units when presales were released in 2004. At that time, the units were selling in the high $400s to high $600s, according to agents and the developer.
The 20-story complex is not on the gulf-front or on Little Lagoon, but does have water views and an enclosed, air-conditioned skywalk across the road to a private beach club and swimming pool.
Vernon Jackson of Daphne had hoped to buy a unit for $225,000, but was happy to get one for $250,000. While he plans to live there full time, he admitted he didn't know how he was going to explain his sudden purchase to his girlfriend. It took him less than 10 minutes to walk away an owner.
The auction started an hour late, at about noon, thanks in part to the heavy winds, lightning and battering rain. But it was mostly due to the long line of folks waiting to register to bid. The bidders were required to bring $10,000 in certified funds for each condo they bid on, according to William Bone, president of the National Auction Group. The auction staff ran out of forms and auction paddles and scurried to make some temporary forms.
Four condo units were sold before the auction started, Bone said. The bidders came from as far as Reno, Nevada; Texas, Chicago, New Orleans and even a buyer in Georgia who made his successful bid via the Internet.
About a dozen disgruntled, would-be bidders demanded and received their checks back after the auction start was delayed.
"They must not be serious bidders," Bone commented. Pointing to the crowd, he added, "This was a huge win for every developer on the Gulf Coast. It demonstrates a pent-up demand."
While many Realtors and their clients waited on edge for the prices to drop to their satisfaction, there were lots of individual investors who took the leap and bid.
One such buyer was Jim Gauntt, who drove to Gulf Shores from Atlanta and went back home a first-time owner of a two-bedroom condo unit for $270,000. He didn't care that it wasn't on the beach. "It's got nice amenities," he said.
Tuscaloosa physician A.B. Reddy bought an interior unit for $250,000 and plans to rent it out, he said.
The crowd and the fact that units were selling for $250 per square foot was "fabulous," said Bob Shallow, owner of REMAX Paradise in Orange Beach, who came to see what the units would command. "You have 1,000 buyers out here. This is sweet. It shows the market is there. This is the best thing that could happen to the real estate market today."
The sales prices helped to establish a bottom to the unit property values, according to Realtors.
"The crowd is phenomenal," said Patrick Daily, owner of REMAX of Orange Beach. "People are ready to buy."
All of the units were brand-new, faced the gulf and had balconies, but the sought-after units were the corner units on floors seven and up, which sported the best views of the Gulf of Mexico.
Some units were furnished. The complex amenities include an indoor pool, two outdoor pools, two spas, a sauna, fitness center, game room and media room. The monthly condo association dues are about $500 a month, Realtors said.