At a time when the average Washington area house costs around $100,000, more than 150 prospective purchasers turned out at a public auction over the weekend for a chance to pay nearly that much just for the land on which to build a home.
At a public sale held Saturday in the exclusive Foxhall neighborhood of northwest Washington, six buyers bought lots ranging from 5,500 square feet to 6,900 square feet for "bargain prices" of $86,000 to $100,000. Five lots had sold earlier for $120,000 apiece. Developer Robert T. Foley turned to the auction technique after having sold or built on only eight of the 23 lots at his Foxhall Terrace project in the past two and a half years.
Foley moved from Potomac, Md., and built his own house at the site and had planned to build and sell others, but was stymied by high interest rates. He built only four houses, three of which are still available, at prices ranging from $589,000 to $695,000.
The sales organizers, Michael Fox Auctioneers of Baltimore, had advertised in several area newspapers and received over 100 inquiries from home building companies, real estate brokers and individuals interested in a lot on which to build their own house. Many Foxhall residents had seen the large sign on Reservoir Road announcing the auction and had come to the sale to find out who their new neighbors might be.
By the noon-time start of the auction, bidders and curious onlookers had filled to overflowing a large yellow and white striped tent set up at the project site at Foxhall and Reservoir roads NW. Auctioneer William Z. Fox proclaimed it a "buyer's day" and told the audience: "Today is your day to buy a lot at your price." He explained that each of the first three lots auctioned off would be "absolute sales," going to the highest bidder regardless of price, and 12 other lots would be sold subject to immediate confirmation for suitable price by Foley. All successful bidders were required to post a $10,000 deposit on each of the lots they purchased, paying the balance within 60 days.
Fox maintained a light tone throughout the sale, aware of the nervousness of many in the audience. Commenting on the signals bidders could use, Fox said: "You can bid any way you want, but you must make sure I know you're bidding," and added: "Don't be bashful. Everyone is here either to bid or to see who is bidding."
Obviously many people were there just to see who else was there, as only 15 or 20 people made offers on any of the lots. Those bidding, however, quickly moved the first lot price from $50,000 to $80,000. Bidding then slowed, and finally stopped, at $100,000. Hoping for a higher price, auctioneer Fox exclaimed: "If you want to buy cheap real estate, now is the time to bid!" The only response--a bark from a dog at the back of the crowd--produced a burst of laughter, but no higher offers. Fox then proclaimed the lot sold to the high bidder, a man dressed in a blue jogging suit and tennis shoes, who quipped: "Loan me ten grand."
Bidding progressed slowly buy steadily on the next five lots. A Chevy Chase attorney looking for an investment bought the second lot, for $90,000. The third buyer, who had come to the sale with his wife and two children, bought a 5,740-square-foot homesite for $92,000. Prices for the final three lots sold ranged from $86,000 to $92,500.
While many of the bidders were uncomfortable with the auction process, one calm buyer was S. Jon Gerstenfeld, a real estate investor who had had the Fox company auction one of his properties, the Trans-Lux Theatre site in downtown Washington, last year. At that sale, the National Food Processors Association paid a record $530 per square foot, over $100 a square foot more than had been paid for any other downtown site.
Bidding stalled with the seventh lot, and the auctioneers had to give up when no one would offer more than $70,000 for any of the nine remaining parcels. Nevertheless, the auctioneers were happy with their efforts. David Fox said that "the results were positive. We sold six lots that had been unsold for two and a half years."
Fox had expected only a small number of bidders to offer high enough prices, in spite of the large turnout. "You had many people here ready to buy at $50,000 or $60,000 who had cashier checks in their pockets," he commented.
Developer Foley was also pleased with the outcome. "It very much met my expectations. There would be no way to sell six lots in seven months. I wouldn't do anything differently if I had it to do over," he said.
The successful bidders seemed just as satisfied. Harbarns Chhabra and his family have lived in Springfield for eight years but wanted a house closer to his downtown Washington job. Chhabra, who paid $92,000 for his lot, said, "Before the sale, we were thinking of paying between $50,000 and $100,000. Our lot seemed like a good one" and, he added, "I feel like a winner." CAPTION: Picture 1, An overflow crowd showed up for the auction of lots at Foxhall Terrace. Six lots were sold for prices from $86,000 to $100,000.; Picture 2, Auctioneer William Z. Fox closes a sale. Photos by M.C. Valada for The Washington Post