BY TUX TURKEL

MaineToday Media, Inc.

A Vermont dairy farmer and innkeeper, Bebo Webster, was in Portland visiting his daughter earlier this month when he drove by an auction sign at Back Cove Estates, a 66-unit condominium complex next to Payson Park. Last Thursday, he crowded into a tent on the condo grounds to bid on one of the 13 condominium units being offered at foreclosure.

For $135,500, he bought a two-bedroom townhouse. His daughter, who rents an apartment and works in Portland, soon will live in the unit.

Portland hadn't seen a condo auction like this one since the early 1990s recession, area brokers say. It's been that long since a sizable condo project has faltered in midstream, and a big crowd turned out in search of a bargain. At Back Cove Estates, buyers found attractive deals, but not fire-sale prices.

News reports can give the impression that the home real estate market is all but dead now. But the turnout, brokers say, suggests there's pent-up demand for affordable properties, notably well-located condominiums that are close to the downtown. As gasoline prices rise, that appeal may strengthen, some experts say.

Set on 13 acres, bounded by two tree-lined brooks and overlooking Back Cove and the city skyline, the project is a five-minute drive or perhaps a 15-minute bike ride from downtown.

"You can't find 13 acres in the middle of the city," said Stefan Keenan, manager of Keenan Auction Co., which sold the units.

Keenan said he had received nearly 500 inquiries about the sale, an exceptionally large number. On auction day, more than 200 people came. They ranged from seasoned investors to first-time home buyers.

"The whole market showed up," Keenan said.

Back Cove Estates is a 23-year-old apartment complex that was converted to condominums in 2004. But the developer, Back Cove Estates LLC, ran into trouble with the lender, Androscoggin Savings Bank, which held a mortgage.

Twelve of the 13 townhomes have two bedrooms and most are 864 square feet. Some are in the midst of renovation. A few are in their original condition. The property is heated by natural gas, which is much cheaper now than fuel oil.

With fast talk and humor, Keenan and his team did their best to get the crowd worked up and competing against one another on price. Using a buyer's choice format, which gives the highest bidders first pick of any unit, Keenan warned participants not to let someone else grab the home they want.

"What you're buying here is one of the best locations in the city of Portland," he said.

Winning bids ranged from $165,000 to $129,000. One double unit, assessed at $360,000, sold to an investor for $238,000. He also took three more units. Other buyers included parents with children in area schools, and a renter who lived in an adjacent townhouse.

Some units in the complex had sold retail for more than $250,000 a few years ago, at the peak of the market. Others went for $170,000 very recently, in line with the city's assessed value.

Taken together, Keenan said, the city of Portland had assessed the auctioned units at $2.3 million.

Following the sale, the bank received nearly $1.8 million. That shows buyers found these properties very desirable, he said.

"You hear all the gloom and doom," he said. "But these buyers came out and paid 82 percent of value, and that's good. It's not a fire sale. It's not 50 cents on the dollar."

Webster, who bought the unit for his daughter, said he had looked at other comparable condos in the city prior to the auction. But he likes the neighborhood, adjacent to Baxter Boulevard. And his daughter already jogs and bikes on the Back Cove Trail.

"Compared to the other properties, I think I got a good deal," he said. "I was surprised the bidding didn't go higher."

The winning bids were high enough to keep most veteran investors sitting on their hands, according to Rita Yarnold, owner/broker of Bay Realty. Yarnold attended with the idea of buying a unit, but found the prices too high.

The new owners have to pay back taxes, she noted, and many need to finish renovating their units. Adding those costs, prices weren't much below comparable retail properties, in her view.

Checking multiple listings, Yarnold found 39 units in the city listed between $129,000 and $174,000; townhouses were closer to $160,000. Her conclusion is that most auction buyers found a good deal, but the sale prices didn't erode values in the retail market.

"If they had sold for $100,000, that would have been a disaster," she said.

The auctioned units had recently been listed for sale with Re/Max by the Bay in Portland. One, for instance, had an asking price of $184,900.

David Banks, the firm's owner/broker, said there had been tremendous interest in the units. A leading reason, he said, is the ability to walk or bike downtown.

Location is key, according to Tom Landry, owner/broker at Benchmark Residential & Investment Real Estate. Landry advised Webster in his bidding. The turnout and bidding prices, he said, signal that buyers see value in an attractive location that's near downtown, as commuting times and gasoline prices rise.

That would be a welcome trend for GrowSmart Maine, an anti-sprawl advocacy group.

Christian McNeil, the group's spokesman, said it's harder to make generalizations in Portland, because of its small size. But around the country, he said, developers are beginning to find energy prices to be a factor in where people want to live.

Projects such as Back Cove Estates, he said, will be well positioned to take advantage of this evolving preference in the future.

"Quality of place is going to boost property values in the long term," he said.