July 3rd, 2015
NEW ORLEANS – NOLA.com – New Orleans’ first ever online auction of adjudicated properties was a barn burner, with bidding wars springing up on several properties, including a vacant lot in the Bayou St. John neighborhood that went for $143,000.
It was the third-most expensive property sold Wednesday (July 1). A storefront on St. Claude Avenue went for $333,000. The lone property for sale in Treme, a shotgun, sold for for $162,000.
Only one of the 80 listed properties failed to sell, bringing in a total of $2.5 million, according to preliminary numbers issued by the city.
City officials were unavailable to comment on the auction, which closed at 8 p.m. for most properties but extended more than an hour later for others as bidding wars pushed back the final bell. For a city that until now had been unable to sell hardly any tax-delinquent properties in recent memory, building up an inventory of 3,000 parcels that haven’t paid taxes in five years or more, the auction looks like an unqualified success.
The data released by the city suggests that the bulk of the properties were purchased by individual buyers rather than investors buying multiple properties. About 84 percent of the properties went to buyers that purchased only a single property.
In addition to the $2.5 million brought in by the sales, the city reaped another $1.2 million in back taxes and penalties paid by property owners who came forward to pay their bills after the auction was announced. Two of the owners appear to have redeemed the properties within 24 hours of the auction.
Even for those whose properties were sold, all is not lost. They can redeem the properties anytime before the sales are closed, which should happen in about three weeks.
For the properties that went for well more than their outstanding tax bill, developers, having seen what the market will bear, may very well seek out owners whose property has been sold in an effort to turn a quick profit. In the case of the Bayou St. John property, for example, the outstanding taxes come to only $18,000 or so. If an investor tracked down the owner, listed as a Quirin Hestein Jr., they might offer to cover the tax bill plus $10,000 lagniappe for him, then turn around and sell the property for nearly five times that amount.
The city plans to hold similar monthly auctions until its inventory is exhausted. The next, an auction of 190 properties, is scheduled for Aug. 5.
By Robert McClendon, NOLA.com | The Times-Picayune
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