With her heart racing, Peggy Seltzer, a nurse at Children's Hospital of Philadelphia, had her game face on at yesterday's auction of 40 luxury condos at the Murano.

As soon as the one-bedroom, one-bath unit appeared on two screens at the front, Seltzer's eyes lit up.

Auctioneer Ken Cullum started with a minimum bid of $275,000, or 59 percent of the unit's original listing price of $465,000.

Over the next minute inside the highly charged Westin Philadelphia ballroom, the price climbed: $300,000, $325,000, $350,000, $355,000.

Seltzer, 37, raised her paddle marked No. 652 again for $360,000.

"Do I hear $361,000?"

Almost shaking, Seltzer then heard the words: "Going once, going twice, going three times. Sold at $360,000 to No. 652!"

Such was the bidding frenzy yesterday among the 325 participants who came to lay claim to the ultimate status symbol of luxury Center City living. That prize comes with a swimming pool, fitness gym, 24-hour concierge, and more at the elliptical, 43-story glass tower at 21st and Market Streets.

All 40 Murano units were sold yesterday, as well as two more units, in a span of just under two hours - a clear signal that there is a demand for condos in Center City, albeit at much lower prices, according to experts.

The lowest winning bid was $335,000 - for a one-bedroom, one-bath unit - and the highest, for a two-bedroom, two-bath unit, was $796,000, according to Accelerated Marketing Partners, which auctioned the units on behalf of the developer, Thomas Properties Group Inc.

Close to $21 million worth of real estate was sold yesterday in one hour and 45 minutes, roughly at a 25 percent or more reduction of the last asking price for the units in the Murano brochure, according to Accelerated Marketing.

"I'm not surprised they sold for more than the original auction minimum bids, but I am surprised they all sold," said Wharton economist and Econsult vice president Kevin Gillen after the auction. "I am encouraged by that.

"We have a lot of unsold units here, and before our market hits bottom, we need to sell them off," he said. "This is a significant step toward that."

About 2,000 condos are currently for sale downtown, according to Trend Multiple Listing Service, Board of Revision of Taxes data, and the developers themselves.

Jon Gollinger, chief executive officer of Accelerated Marketing, said the auction once again proved who was king.

"This is a watershed event for the Philadelphia condo market, pure and simple," he said. "All people have to do is analyze this building in relation to what the consumers paid, and then really extrapolate from that to determine what their properties are worth in the eyes of the consumer. The consumer rules."

The auctioning of high-end condos at steep discounts has become a survival strategy nationally for struggling developers to prevent foreclosure or bankruptcy as their condo towers sit more than half empty.

Gollinger said he had held similar auctions in other stagnant condo markets, including Atlanta and Chicago. His firm has an auction in Boston today.

Experts say the Murano auction was indicative of how far and deep this recession has cut. The luxury sector in particular has been hammered.

According to the city's Department of Records, condo sales citywide declined 64 percent over the last year, while sales of high-end condos declined 24 percent. There were 712 condos sold in the city in the first quarter of 2008. Of those, 115 were priced at $500,000 and up. By comparison, there were 255 condo sales during the first quarter of this year. Of those, 87 were priced at $500,000 and up, with more than half of them occurring in the recently completed Residences at the Ritz.