Max Spann Berks County Auction Featured in the Reading Eagle

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Walter T. Greth has built nearly 2,000 homes in Berks County in the past four decades, and he wants to keep building.

That, as much as anything, explains why Greth has arranged what may be one of the largest real estate auctions in county history, to be held March 10 in the ballroom of the Riveredge in Bern Township.

About 650 lots and homes, scattered across the county and owned by Greth Development Group, will be auctioned. Greth said the drastic downturn in home-building activity has crimped his revenue so much that an inventory-shedding auction makes good sense.

He said he has no plans to go out of business.

"We have to figure out how we are going to do business in this marketplace," said Greth, owner of both Greth Development Group and Greth Homes. "I just feel real strongly about the fact that this is what we should be doing at this time."

Leaders of the Home Builders Association of Berks County said the auction was a sign of the times following a steep decline in new home construction.

In 2004, Berks municipalities issued 1,600 building permits. The vast majority, according to association Executive Director Ronald A. Rohrbach, were for single-family homes.

Last year, a total of 150 permits were issued.

"Walter Greth is doing the best thing for his business," said Kevin Kozo, association president. "In my opinion, he is being very smart in the way he is handling it."

The auction will be split into two sessions. The first, focused on single-family home buyers, will include town homes in Kaercher Creek in Windsor Township and Crestwood South in Exeter Township, single-family homes used as model homes in seven different developments, and single-family lots.

The second session will focus on larger-scale offerings suitable for developers, including land in Windsor, Oley, Amity, Lower Alsace, Exeter, South Heidelberg, Lower Heidelberg, Robeson, Cumru and Spring townships. Many lots to be sold in the second session have been improved with streets and utilities.

The auction will be conducted by Clinton, N.J.-based Max Spann Real Estate and Auction Co.

"It is a live, call-out auction, where people raise their hands," said Robert L. Dann, chief operating officer.

Max Spann, president and chief executive officer, said developers use auctions to shed large amounts of inventory in a single day.

"Greth is employing the same strategy in selling this major portfolio of properties," Spann said.

One effect the auction will have on the general real estate market will be in the creation of "comparables," according to Jeffrey T. Sicher, president of the Reading-Berks Association of Realtors. Prices of existing homes sold at auction will be used by appraisers to help determine values for other, similar homes in the same market area.

Sicher said investor groups might make auction purchases that they could immediately re-sell, or hold, rent and sell later for potentially greater profit.

Greth, he said, has been a significant force in the Berks building industry.

"Auctions like these are a reflection of the current condition of new construction," Sicher said.

Greth said he has accumulated so much land that, given the market slowdown, he will never be able to build homes on much of it.

At the same time, he said, he continues to pay real estate taxes on every unsold lot, and he makes regular payment to lenders on significant sums borrowed for putting in roads, curbs, and utilities.

Revenue coming in from home sales is a fraction of what it once was.

In a single year at the height of construction activity, Greth said, he built 156 homes. He said the current pace is 20 to 30 houses a year.

Greth said he hoped the excitement and ripple effects of the auction would trigger activity in home construction.

"We are trying to stimulate what is going on here," he said. "We want to try to move people off the dime."

Greth, who is president and sole shareholder of both of his companies, attended Reading-Muhlenberg Vo-Tech school, where he met an instructor who got him interested in his trade.

"I took a total liking to and fascination with house-building," he said.

Greth builds custom homes. Customers, he said, choose from one of 30 basic models and then tailor the design to their liking.

A 5,000-square foot Greth Design Center in Maidencreek Township serves as a one-stop shop for customers, offering materials and styles for all aspects of the building process, including kitchen cabinets, vinyl siding, lighting and rain-gutter covers.

Greth opened the center in 2004. Now, it is for sale.

Greth Homes once had 44 employees and now has 15.

"I had guys working here 25 years and I had to lay them off," he said.

Greth said he believed many auction buyers would get bargains. At the same time, he said, he expected to generate enough revenue to allow Greth Homes to move forward with his plan of building homes outside of Berks County.

He said, "We have to go wherever people want to build homes."