Heavy equipment holders are selling their products at auction for less than expected, and items such as excavators, backhoes, or heavy construction machinery are being sold due to too much idle time.

Sellers said they were lightening their inventories to pull in operating capital; Buyers said they were lured by cheap prices, although several expressed trepidation to spend money on equipment that could remain idle for months, reports Tiffany Hsu for the LA Times.

Bargains are everywhere, such as a Volvo wheel loader that sells brand new for $1.4 million, and went for $150,000 at auction; an excavator that sold for $112,000 new went for $60,000 at auction. The bidders have had little reason to spend, as building permits and new home construction has been frozen for months. In fact, new housing permits have fallen 38.4% in September compared to one year ago, according to Department of Housing and Urban Development statistics.

Nevertheless, there are equipment upgrades to be had, as well as bargains for those who are looking. Around 20% of bidders are not actually planning on using the machinery, rather, they are going to re-sell the stuff for higher return on a healthier construction market.

• SPDR S&P Homebuilders (XHB), down 53.4% year-to-date

• iShares S&P Global Industrials (EXI), Caterpillar is 1.4%; down 54.1% year-to-date

Tags: EXI, Homebuilders, Real Estate, XHB