A series of auctions in two of California’s most exclusive communities have brokers worrying about a possible decrease in property value. 2,000 acres of Clint Eastwood’s ranch near Carmel California, a small city in Monterey country, will soon be going to auction. Like Eastwood, Norman Waitt, the co-founder of Gateway Inc., also plans to sell his 15.4-acre home, in a gated Tehama community, using the same method. Waitt’s property, which he originally purchased for approximately $3.4 million, is said to be starting at a bid half the amount of the original figure.
Both Carmel and Tehama are comprised of many preserved lands encompassing small, tight-knit communities. It is the size and closeness of these communities that has brokers concerned about the auction method. Some believe that the residents of these small communities know each other well and do not want to compete with one another over something as significant as a piece of valuable property. Brokers predict that, as a result, most people will not participate in the auctioning of these properties and that they will be sold for far less than what they are worth.
Source: Wall Street Journal online