Homes sold at a loss but builder isn't complaining

November 02, 2007
The Modesto Bee

It was a risky move to sell new houses to the highest bidder without a minimum price, but Florsheim Homes' gamble last weekend apparently paid off.

Well, sort of.

The builder admits it lost money on all those "name your price" deals in Ceres and Turlock. But considering the depressed real estate market, Florsheim is happy it finally found willing buyers.

"The houses ended up selling at 10 to 17.5 percent discounts from our last ask- ing price," said Joe Anfuso, Florsheim's chief executive. "People thought I was crazy to do (the auction without mini- mum prices), but it was clear to me there were plenty of buyers just waiting for the right deal."

Anfuso sold nine houses during the promotion, the cheapest of which went for "just above $200,000."

"These were families buying. Every offer I accepted was for an owner-occupied house. There wasn't an investor in the bunch," Anfuso said. "Most were first-time buyers and young families. There were some single moms. I saw some tears. They were happy to get a home."

Investors looking for rental houses also made offers, but Anfuso said they were outbid. He said one investment group wanted to buy all the remaining houses in Florsheim's Rose Walk and Valley Rose developments, but it sought a 35 percent discount.

There ended up being 10 bidders for the two Rose Walk homes in Turlock and 20 bidders for the seven Valley Rose homes in Ceres.

"The higher the square footage of the houses, the bigger the discount (we had to give)," Anfuso said. "The sweet spot in the market right now is for houses in the $200,000 to $250,000 range. That's what people are looking for."

Anfuso said Florsheim is not planning to offer future name-your-price deals at its remaining subdivisions, Valley Park and Valley Blossom in Manteca, because sales there are "holding their own."