Saddlebrooke's Last Call

Saddlebrooke’s developer is selling off the final 35 lots of the 4,500-acre planned residential community at an absolute auction in September.

Developer Clyde Lorance said the auction is in response to lackluster sales in a down market.

“Sales this year have slowed substantially, and we decided to take a new approach,” Lorance said. “It’s something we’ve never done. It has generated a tremendous amount of interest. We anticipate having at least a couple hundred people at the auction.”

The auction is scheduled for 2 p.m. Sept. 17 at Saddlebrooke, an incorporated village straddling U.S. Highway 65 about 10 miles north of Branson.

While Lorance said the auction route was a difficult choice, he’s counting on bargain hunters – coming from roughly eight states – to make it successful.

Most lots available are -acres, but five lots are three to five acres. Lorance estimates the lots could sell for half of their average prices. Lots under an acre historically have sold for roughly $60,000 to $80,000. At Saddlebrooke’s peak, Lorance said 22 lots sold five summers ago for an average price of $112,000.

In the last 12 months, Lorance said he has sold more than $5 million in land for single-family homes on larger lots, and he still owns hundreds of acres with no current plans to develop.

To date, roughly 350 lots have been sold at the residential community that he launched 10 years ago and incorporated in Christian County in 2003. Lorance said there are 90 existing homes and seven under construction.

Risky and rare
Walt Nelson, associate professor of finance and general business at Missouri State University and a licensed Realtor, said absolute auctions are extremely risky and fairly rare.

“Whatever it sells for at auction, that’s its price,” Nelson said, noting there are no minimum bids set by the property owners. “(Lorance) is taking a big risk by holding an absolute auction.”

He said the unique sale does not necessarily signal a financial hardship; it could just be a quick way to unload several properties.

Lorance said he was in good standing with his lender, adding he is facing neither foreclosure nor litigation related to the development.

The most recent example of an absolute auction Nelson could point to locally occurred 13 years ago.

In his classes, Nelson has discussed the 1998 auction by Branson businessman Dale Crawford to sell the Ozark Mountain Buffet, two hotels, the Ozark Mountain Amphitheater and some commercial acreage. That absolute auction netted $2.2 million, a sum that area real estate agents thought was well below market values. At least one motel real estate expert had expected the properties to sell for around $8 million, according to Springfield Business Journal coverage at the time.

Willing to chance
Nelson said with 35 lots up for sale, he believes Lorance needs at least 70 serious bidders to have a successful event. “You can’t have five bidders there. You need 500,” Nelson said, adding some of that pressure rests on the auctioneer.

Lorance said Bob Hughes of Wheaton-based Southwest Auction Service LLC is hosting the auction. Hughes did not return calls for comment.

Lorance has rented some billboard space on Highway 65, and been in contact with a number of people he’s come to know in the industry to promote the event. He declined to disclose how much he is spending to market the auction. Lorance doesn’t expect a single lot to go without a bid. “That’s not even a possibility,” he said.

Buyers are required to put 25 percent down to secure their winning bids, Lorance said.

“Everybody likes a bargain. We’ve got a great community. We’ve got a great product,” he added. “The economy has nothing to do with the beauty and the serenity, the clean streams and the 13,000-acre national forest near Saddlebrooke – those things are all constant regardless of the economy.”

Lorance purchased roughly 2,200 acres straddling Highway 65 nearly 20 years ago, prior to starting the development.

“By sale day, 100 percent of the work – all of the water lines, all of the sewer lines – will be finished,” Lorance said. “This is the last phase I’m developing, and we did save the best for last. I don’t know how long it would take to sell these in the normal business cycle of selling lots, but I knew if we had an absolute auction, the day the auction is over, they’d all be sold. And I was willing to take that chance.”[[In-content Ad]]