Imagine what it feels like to close on a unit and a month later have the developer auction identical units for 50% less, wiping out most if not all of your equity and resulting in a loss of a couple hundred thousand dollars.
What if you were one of the thousands who watched this auction knowing that the date for your condo's closing was just around the corner.
Lets assume you had put down a 75,000 deposit on a pre-construction, 850 sq foot, 1-1, unit that cost $375,000. (Yes they really did sell for that in 2005)... Do you...
1. Walk away from your 75,000 deposit
2. Close on the unit anyway paying 375,000 for a depreciating asset that’s now only worth 200k.
I have a strong feeling fear is starting to take hold.