After the bust, luxury is dirt cheap 

On a recent Sunday afternoon, about 250 people herded into a Marriott Hotel ballroom to bid on a dream. Restless, vigilant, they came with checkbooks, cell phones and color-coded brochures.

To take the edge off, a musical duo glazed the room with smooth jazz. Waiters ensured the back table was well stocked with glasses of ice water—but no coffee. Coffee is for closers, reserved for the bankers decamped in an adjacent room with calculators and laptops.

Suddenly, the music stopped.

"Ladies and gentlemen," the auctioneer from Rowell Auctions announced, "we have granite; we have tile; we have carpet. We have a very nice home or investment for you today."

For several weekends prior, prospective buyers had roamed Building No. 2 of Meadow Wood Park in suburban Raleigh, where 36 new and vacant luxury condos bore such regal names as Quincy, Greenwich, Providence, Concord—titles befitting British monarchy. The units still smelled of fresh paint. The carpet was the color of coffee with cream, the walls a shade of taupe common in panty hose. Providence, also known as Unit 303, a 1,344-square-foot two bedroom, would be sold furnished, and it was staged with plastic plants and beds festooned with fat pillows. A ceramic Dalmatian guarded the gas log fireplace. On the deck sat a birdhouse. It was empty, too.

Meadow Wood Park was once the dream of New Jersey builder Jim Bovino, who, in 2004, purchased the 10-acre property off Atlantic Avenue north of the Beltline for $2.1 million and saw an opportunity in selling $265,000 upscale condos. He planned to construct five buildings, but by the time he finished Building No. 2, the real estate market had collapsed. The remaining three buildings were never constructed. An additional parking lot has been left rutted and muddy. Royal Bank America foreclosed on the property.

Today, Bovino's dream was for sale—at deeply discounted prices.

At the Marriott, John Gentry had come to the auction in hopes of buying a cheap town home for his mother, who is downsizing. "This is the kind of thing we're looking for. It's a better price than the open market," said Gentry, who, 16 years ago, bought a home that was in foreclosure. He still lives in it.

At 1:15, Rowell Auctions' main ringman, Max Spann Sr., instructed the crowd, "Now everybody stand and put your arms around the person next to you."

A woman embraced me and said, "God bless you," then she turned to the man on her left, who hugged and wished her good luck.

Then the auctioneer's gavel fell.

"Oneninetyfive, oneninetyfive, oneninetysixdownhere ... oneninetysix, oneninetyseven—bid! Oneninetyseven once, oneninetyseven twice, sold for one hundred ninety-seven thousand dollars! How many units would you like?"

And just like that, Unit 303, Providence, with its birdhouse, pillows and plants, was gone, at well below its pre-bust asking price of $269,000.

Part profilers, part carnival barkers, auction ringmen are charged with stalking the aisles to spot desire in bidders' eyes. They stare, point, rub bidders' shoulders, graze their elbows—gentle yet effective tactics to encourage them to increase their bids—which, when successful, inspire the ringmen to blurt an "aarrrhh!" or a "hoaah!" and punch their fists in the air.

Spann, a veteran ringman who appeared to be in his 70s, worked the back of the room, jiggling three, then four, of his fingers, which were the size and shape of penny rolls.

"Onethirtyfive, onethirtyfive, onethirtyFIVE, bid! Oneforty. Onefiftydownhere—the lady in the purple—onefifty, gimme onefiftyfive ..."

"Hoahhh!" yelled Max Spann Jr. from far stage left. Having identified a bidder, he pumped his fist in the air with such force that his tie flipped over his shoulder.

Bidder No. 167, Stephanie Yamashita, sat in the back row near the bank. Her eyes widened and drew a bead on the ringman, who rushed to her side as the auctioneer slowed his cadence.

"One forty-seven, one forty-seven, one forty-eight ... sold! For one hundred forty-eight thousand dollars. What a buy, what a buy!"

Yamashita chose Unit 104, the Quincy, a 1,288-square-foot condo that three years ago would have fetched $249,000. "I got a wonderful home," she said, still breathless. "I had a price in mind. I knew what I wanted. I thought, 'I'm going for it.'"

One by one, the winning bidders were whisked away to the moneylenders' quarters, where Bank of America was offering financing for the properties. In 2008, Bank of America purchased for $2.5 billion the nation's largest predatory lender, Countrywide, and has since agreed to spend $8.4 billion to lower the interest rates or loan balances of nearly 400,000 Countrywide customers with subprime loans or adjustable-rate mortgages.

After nearly two hours of bidding, "the cream had been picked," a bystander noted, and the ringmen and auctioneer found it harder to move the last units.

"One hundred twenty-eight thousand dollars? What are you going to find in Raleigh in that kind of neighborhood?"

"One hundred twenty-five thousand? Every hand in the house oughta be up at that price."

The final condos sold for $116,000.

Gentry and his mother left without buying. "The prices are too high," he said.