Watch video of the Bitterroot propertyWith more onlookers than bidders, the owners of a restored Craftsman-style “trout lodge” near Hamilton decided to cancel Monday's auction of their 3,500-square-foot home.
Owners Larry and Mary Melia had hoped to generate excitement and a bidding frenzy for their ranch by choosing a “no reserve” auction on their home with 40 acres and an adjacent 20-acre parcel. But, moments before the event, they chose to exercise a clause allowing them to withdraw from the auction before the bidding commenced.
Real estate auctions typically are associated with distressed properties or foreclosures, but the Melias said the prospect of marketing to high-profile clients by an Alabama-based auction team offered the allure of a sale by day's end.
Their auction, however, coincided with increasing jitters over the U.S. economy and worries about the wobbly finances of federal mortgage giants, Fannie Mae and Freddie Mac.
Several real estate agents said the canceled auction also reflects a weakening market for expensive homes in the Bitterroot Valley, where reportedly just one home sold for more than $1 million in the past six months. They said there is more competition these days for buyers of high-end homes, including about 40 homes currently listed for between $700,000 and $1.2 million.
About two dozen curiosity seekers showed up for the event, but just four people registered for the bidding. Several spectators began speculating about a possible cancelation just moments before the scheduled 1 p.m. auction.
Sentiments were mixed, with some people saying the auction should have gone forward, while others said they understood the Melias' decision to cover their expenses.
In 2002, the two doctors bought the neglected property - reportedly a speakeasy during Prohibition and former bordello with three bullet holes in the woodwork - and spent about $450,000 and six years refurbishing the land and home. Several real estate agents said the couple purchased the property for about $780,000.
Tommy Bone, vice president of the National Auction Group Inc. in Alabama, said his team would contact people who expressed interest in the property or who took tours to rekindle interest. He said he had positive signs from people in Florida, New York City and elsewhere.
He said it wasn't the first time a property has been withdrawn from an auction, but “it is very rare that you see this happen.” He said the market has shifted since he contracted with the Melias to auction the property this spring.
He said a stockbroker from Arizona, who had a starting bid of $1 million, dropped out at about 10 a.m. Monday after he “crunched the numbers” and factored in the state of the stock and real estate markets, Bone said.
Bob Dunbar of Corvallis, who had registered to bid on the home and its 40-acre parcel, said he grew up near the property. He said he was disappointed the auction was canceled, but said he understood the Melias' decision.
“I expected half the town to be on the lawn just to see it, if nothing else,” he said. “With the number of people here, I would have jitters if I were the owner, too.”
Larry Peterson, a retired rancher and wheat farmer from Nebraska, is on the auction house's mailing list. He said he came to watch the auction with his wife, Shirley, while they were visiting friends in the area.
Peterson said he was disappointed the auction was canceled.
“I think it's too bad, and is especially unjust for people who came here as earnest bidders. We're not letting the market function like the market should,” he said. “But I think we're in a downslide with the whole economy, and it starts off with the energy prices.”
Steve McGough, a builder from Bozeman who also had registered to bid, said he has family ties to the area dating back to the 1920s.
“This isn't what I was expecting, but you don't know unless you check it out,”
he said.
Carolyn Weisbecker, a real estate agent with Coldwell Banker in Hamilton, also had registered to bid. She said this wasn't the first auction to be canceled in the region because of insufficient interest.
“I'm not sure auctions are the best way to sell real property,” Weisbecker said. “It picks a point in time - the only buyers are the ones you get that day.”
Rita Atencio, a local who came to watch the auction, said she's witnessed the Melias' transformation of the property over the years as she drove past the property.
“An auction always gets people's attention,” she said. But the outcome, “was kind of sad. I hope it works out for them.”
Larry Melia said the couple had been “adamant” with the auction group from the beginning, insisting they could withdraw if the number of bidders or enthusiasm was less than expected.
The Melias said they were pondering their next step.
“We're not sure what we'll do,” said Larry Melia. The property “is still ours and we're proud to have it.”
Reporter Pamela J. Podger may be reached at 523-5241 or at pamela.podger@
missoulian.com.
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