As far as I can tell this is totally legit. I've been to an Alex Cooper auction in Baltimore. It was a great house but just not on the block that would have made sense for me. As I remember no one bid on it, I don't believe that will be the case with DC properties, even the vacant lots.
These are not like the old $1 auctions back in the Barry years. No, the deposit for almost all of them is $5,000 and the starting bid is $20K. It'll bet that everything west of the river will go for several times the opening bid, possibly around $100K at the least, even for lots.
I think this is a wonderful thing. The problem with properties that sit in the government's inventory is that they sit. And sit. And sit...... and...... sit. Right now the iron, or the DC real estate market is hot. There could come a time when it was like the 90s and you couldn't give away houses (crack, murder capitol, nightly gun fire and a high risk of getting beat up walking home, good times), so now is as good as anytime.
The ones that aren't vacant lots need a good contractor. There are strings. Many mention "Sold Subject to Covenants: The properties in this auction are being sold subject to an affordable housing covenant as well as a construction covenant. Failure to abide by these terms will result in the forfeiture of your deposit before closing or potentially the property itself once you have taken title. Please review the documents section for the full terms." So, you just can't buy it and sit on it and I'm not sure what the affordable housing thing is. If I were so inclined, I would want a property for my own personal use.
Hopefully, this will bring several properties back into use.