Thursday, February 28, 2008

Shorn in The Shore

Now we’re talking! Here is almost the exact property I’m looking for (hat tip to SW, an eagle-eyed reader).

Address: 185 Quincy AVE #301, 90803
Wishing Price: $399,900
Size: 2 beds, 2 baths, 878 sq. ft. (built in 1971)
$/Sq. Ft.: $455
Purchase price: $270,000
Purchase date: 1/2003
MLS#: P619139
On Redfin: 35 days
Description: OPEN HOUSE EVERY FRIDAY FROM 3:00 TO 6:00 p. m. JUST REDUCED $25,000! TURNKEY!!! THIS IS THE BEST BARGAIN YOU WILL EVER FIND IN BELMONT SHORE. SPACIOUS 2 Bedroom 2 Bath Condo on the 3rd Floor 'One block off 2nd St. ' in Belmont Shore. Buyers will Love this one. Upgraded with Remodeled Kitchen and Bath. Master Bedroom with Bathroom and Wall to Wall Closet. 2nd Bedroom has Walk-in Closet. Custom Painting throughout. Large Living Room with Balcony over looking Quincy, just right for that Morning Coffee or Evening Coctail. Current owner rents a space for $50.00 in the parking garage and the space will transfer over to the new owner at the same rate. THIS PROPERTY IS VALUE RANGED FROM $399,900 TO $414,900.

878 square feet is “SPACIOUS”? To a midget wrestling tag-team, perhaps. Other than the “Coctail” typo, annoying Title Case, a decent listing.

A few things:

First, when I started writing this post the asking price was $419,000. In the time it took me to write the rest of this post, the price was reduced $20,000. For those of you counting at home, that's a $25,000 haircut in a matter of 18 days, for a total of $35,000 in reductions since the original listing date.

Second, according to the agent this place is "VALUE RANGED FROM $399,000 TO $414,900." That statement is meaningless. The truth is, this house is worth whatever the market will pay for it, not what or says. And I certainly don't need the seller's representative telling me what to pay for a place.

However, their aggressive pricing strategy has certainly caught my eye. And like a piranha smelling blood in the water, the desperation has piqued my buying interest as well.

Why this property suits me: It’s in a prime location in Belmont Shore (walk out the front door right onto 2nd street), on an upper floor in a decent building, has secure parking, tasteful and simple upgrades, a reasonable HOA fine, and a balcony.

Why I would lose interest: It’s very small at 878 square feet.

Deal breakers: Community laundry, one measly parking spot, and the price, duh.

This area has been largely immune to the dramatic median price drops in LA and Long Beach and I think the reasons are obvious—this is an extremely desirable neighborhood with a considerably higher median income.

Because this is a place I would consider buying (if the fundamentals aligned), let’s run the digits (which I now have to completely re-do because of the price slash--but that's a good thing):

Down Payment: A 10% down payment would factor in at $39,900.

Monthly Payment: Financing the remaining $359,910 at 6% would leave you with an approximate monthly payment (including property taxes and homeowners insurance) of $2600. Then slap on the $167 HOA fine—errr, fee, $50 for a garage space (you must be kidding—I’m paying almost half a million for an apartment and I’m penalized an additional fee to park in my own building? No sweat, street parking in Belmont Shore is a breeze, right?) and we’re looking at a payment of roughly $2800 per month.

Income Requirement: Assuming a 4x income calculation, the annual household income required to buy this condo is $100,000 per annum. Not an issue for a couple bringing in two decent incomes, but with such a small layout it would be very cramped for two. Plus, if you give your partner the one and only parking spot, you’ll be slinging the Explorer around the block for hours looking for a spot on the weekends.

To see how overpriced this condo is, even at it's dramatically reduced price, let’s quickly check local rents in the area and compare it to our $2,900 carrying cost. Whoops, looks like you can rent and get more for less money:

Description: $1950 / 2br - Spacious condo in belmont shore w/parking. Beautiful and spacious 1600 sq ft 2 bedroom, 1 3/4th bath condo. Close to Belmont Shops and Belmont Olympic Pool. The unit features 2 parking spaces, stove top, oven, dishwasher, and new berber carpet throughout.

Now, there’s no denying this rental condo isn’t quite as nice as the Quincy property but it’s almost DOUBLE the square footage (roll that around in your skull for a minute), has TWO parking spots, and is in a similarly prime location. Plus, it’s a whopping $1,000 a month cheaper!

Or check this one out:

Or this:

The quibblers would argue there are differences in these properties but the overall point is obvious: Prices have a long way to go before they reach parity with local wages and rents.

But enough about those boring rent vs. buy calculations—let’s check the comps! Remember how I described the upgrades for #301 as “tasteful and simple”? Well, what follows is an example in the same building of an “alternative” approach to decorating.

Address: 185 Quincy AVE #202, 90803
Wishing Price: $479,000
Size: 2 beds, 2 baths, 900 sq. ft. (built in 1971)
$/Sq. Ft.: $532
Purchase price: $440,000 (YOWCH!)
Purchase date: 4/2005 (Timing couldn't be any worse)
MLS#: P617543
On Redfin: 45 days
Description: Belmont Shore living at it's finest. This corner unit w/ master suite condo offers custom-lit gourmet kitchen w/ granite counter tops, Neff custom cabinets & all stainless stell appliances wich opens to the spacious custom painted living room. Remodeled bathroms w/ Master Laid tile, new shower enclosures, & new fixtures are some of the additional features the gorgeous unit has to offer. Large balcony w/ view of Quincy & 2nd Street. Walk to everything including 2nd Street fine dining and shops. Low HOA dues!

Who knows what people are thinking when they do this kind of radical personalization to a home’s interior and then sell it as-is. I’m guessing something like: “I have such impeccable taste that this d├ęcor and color combination will surely appeal to a wide array of potential buyers.”

In a declining market with a shrinking group of qualified buyers, it’s a bad idea to reduce that group even further by employing a “creative,” “modern” decorating style that alienates more potential buyers. Headache inducing, completely out of place in this building, and more than enough to dissuade all but the most adventurous buyers. The “bathroms” (is that a tub you can burn music onto?) look good, so they’re clearly capable of exhibiting good taste.

So just what in holy hell happened in the kitchen?

Maybe it’s just not my cup of tea. However, I have a feeling there aren’t many tea drinkers out there willing to pay top dollar for someone else’s whimsy.

One look at this “gourmet” kitchen and I know the stainless steel (or “stell” according to this agent) trend is dead dead dead. I always liked the stainless look, but in this application it just looks gaudy. Plus, stainless appliances are entry-level stuff in this price range. Am I supposed to be floored by its mere presence, when practically every property I’ve featured on this site sports it?

Now let’s take a look at the kitchen from #301:

Man, who ever thought plain, "boring" white tile and appliances could look so good compared to more expensive stainless facades and granite countertops? Not only is the less expensively upgraded white kitchen in #301 more attractive, it’s actually a huge selling point compared to the Blue Man Group vomitorium at #202.

And let’s not ignore the most obvious distinction: Price. A $77 per square foot premium for 22 more square feet, ugly paint, and weird kitchen cabinets? I’ve got bad news for you, my friend. It’s not going to happen.

In fact, I don’t think it’s going to happen for either of these sellers. One look at the sale history and it’s obvious these are both overpriced.

Jan 18, 1991 - $151,000
Sep 18, 1996 - $100,000
Apr 23, 1997 - $111,000
Sep 24, 2001 - $187,000
Jan 10, 2003 - $270,000

#202 (get it?)
Sep 18, 1990 - $151,000
Oct 24, 2000 - $165,000
Apr 19, 2005 - $440,000 (the owner from 2000 to 2005 made out like Paris Hilton at Lollapalooza)

Our seller at #202 is in for a lot of pain here. If his upstairs neighbor unloads #301 for the sub-$400,000 asking price (that would be an approximate profit of $100,000 after upgrade costs and commissions—wow!) then it will set the new comp for the building, period.

That means the Smurf-tastic love den’s price will come crashing down $80,000 INSTANTLY. A new comp of $400,000 instantly puts #202 $40k in the hole from what he paid just three short years ago.


Sure, you could argue the quality of the materials in #202 compared to #301 adds a premium (stainless, granite, nicer bathrooms with glass shower doors--there's no doubt), but in this market I can’t imagine the difference is much more than $10,000 to $15,000.

One delusion that I’m particularly fond of is sellers who believe what they spent in upgrades actually translates to a HIGHER property value. That may have been true when anyone with a pulse could get a loan and rampant competition was causing prices to jump every month, but those days are over.

In fact, the days when sellers could upgrade a property and get out what they put in are numbered as well.

We are fast approaching a real estate environment when a $30,000 upgrade translates to only a partial return on investment. Remember, EVERYONE has granite, travertine, and hardwoods—even the lower-priced foreclosures and bank-owned properties competing with these condos.

Lest we forget, the entire comp scenario is assuming that #301 sells for anywhere near the asking price of $399,900. Unless a fool flush with cash and an affinity for falling knives knocks on the door tonight, we’re going to see many more months of price cuts before interest in either of these properties is piqued.

Even worse for #202, his neighbor bought for $270,000 before the bubble inflated prices to ridiculous levels (like, say, $440,000), meaning he: 1) Has equity in the home, 2) Has a hell of a lot more room to negotiate, and 3) Will absolutely sink #202's ship.

Real Estate predictions are like assh*les, everyone has one and they all stink. With that said, unless two miracle buyers magically appear, I can’t imagine either of these places selling for more than $350,000.

Just to put $350,000 in perspective, for #301 that price would still be almost 10% annual appreciation since the 2003 purchase! That’s pretty hefty for a tiny condo with laundry shared with an entire floor and one parking spot.

Plus, since all of the data suggests we have already rolled back to (at least) 2005 prices, meaning the appreciation from the last few years has been wiped out, a price of $350,000 makes better sense. And if you crunch the numbers, $350,000 pretty much puts it in line with local rents, wages, and lenders’ current debt-to-income ratio requirements).

What say you, dear reader?

Thursday, February 21, 2008

There Will be Blood (Monthly)

This purchase is like breaking up with your girlfriend while she's giving birth to your twin daughters: terrible timing.

Address: 5418 Heron Bay, 90803
Asking Price: $899,900
Size: 3 beds, 3 baths, 1748 sq. ft.
$/Sq. Ft.: $515
Year built: 1982
Purchase price: $947,500 (YIKES, BUDDY!)
Purchase date: 5/2007
MLS#: P605318
On Redfin: 128 days
Description: Spinnaker Coves. Highly upgraded luxury townhouse. All bathrooms have been remodeled. New granite in kitchen. New appliances. New A/C, heat pump and 75 gallon water heater. New window coverings T/O. Formal dining room, eating area off kitchen. Plasma above fireplace. All furniture is new and negotiable. Master bath has granite, new shower and spa tub. Hardwood built-ins with granite counters off kit. and dining rm. Gated complex with pool, clubhouse, lighted tennis courts, exercise rm. Will consider a lease. Furnished, $4,000 per month.

Bravo! An informative, grammatically correct, and typo free description! Somebody's definitely going to earn their commission when this place sells (in 2017).

To provide some perspective on how insane the bubble years were, let's look at the rampant appreciation over the years.

Aug 11, 1989 - $385,000
Dec 17, 1992 - $320,000
Sep 09, 2003 - $497,000 (this seller, whether knowingly or not, timed the market perfectly and hit the freaking lottery)
May 18, 2007 - $947,500

You read that right: Just shy of a million clams for a condo--errr, townhouse last year. Now, before the Kool-aid drinkers have a tantrum (by the way, where did the housing bulls go? You used to provide such valuable insults--errr, insights to this blog. I know you're still reading every day, but for some reason you've been awfully quiet in the comments section), this is in a very desirable area and I doubt anyone would claim it's not worthy of a premium. But a million clams? Not in a million years.

This is an object lesson in A) getting carried away with perceived premiums, B) what happens when you listen to the National Association of Realtors and other commission-heads when they tell you "Now is a great time to buy!!!!!!", C) dabbling in real estate when you don't have enough financial acumen to correctly count the change in your pocket, and D) Long Beach sellers' pricing strategies being driven by willful ignorance of real estate reality.

Let's crunch some numbers and see what our little rusty-knife catcher got himself into.

Assuming he/she put down 10% (they purchased before the first credit crunch in August '07) and financed the remaining $852,750 at 6%, they have a rough monthly payment (principle, interest, taxes, insurance) of $6,000.

Throw on top of that a monstrous $575 HOA fee, and we're talking about a monthly carrying cost of $6,575 (there are significant tax benefits, but they are largely cancelled out by property taxes and ancillary ownership costs).

So even if they could find someone to lease this place for the $4,000 a month they're asking, they would still bleed cash to the tune of -$2,575 per month! Wow. Get a tourniquet.

And remind me why someone would would pay $6,000+ per month to own a place they could rent for $4,000? Oh, that's right...THEY WOULDN'T.

Even more shocking is that this real estate mastermind bought a mere nine months ago and is already trying to sell it. The good news is, unless this seller knows some extremely efficient contractors, the upgrades were performed prior to their purchase. That means at least he won't be out that money when this place sells.

But he will still be out money. Lots of it.

If a mongoloid with a head wound from his fall from the turnip truck miraculously bought this condo tomorrow, for the pleasure of owning for a whole nine months this seller would lose more than $100,000 including commissions. Good Lord, that's gotta hurt.

And that doesn't even include the $60,000 they've already paid toward their mortgage.

But selling tomorrow isn't going to happen, and it's obvious this place won't sell for anywhere near current asking price. What's my reason? I've got 128 of 'em. At over four months on the market with no price reductions, this place isn't going anywhere. And the bloodletting will continue until they're so upside-down, they mail in the keys and hightail it out of there.

Want another reason? How about their neighbor just a few houses down:

He recently made a drastic price cut to $874,500 and he's still languishing on the market, so what hope does our seller at 5418 have?

Friends, my only hope is that my message is getting through to some of you. If this poor guy stands to lose more than 100 Large in just nine months, then what hope do any of you have staying above water if you purchase in the next few months?

This is going to get much worse, so bad that it will make my previous price predictions look mild in comparison. Don't even think about buying in Long Beach until the sellers catch on to what we already know: Prices have a long way to go before buying makes any kind of rational sense. If you don't believe that, then odds are you'll end up like this seller; desperately trying to stop the bleeding while you have a 1000cc IV of Heparin in your vein.

Monday, February 18, 2008

Pain Pricing

While a vast majority of sellers and their agents cling to wishing prices and fantasy house values, some sellers are beginning to realize that the bubble has burst, ridiculous zero-down, interest-only, adjustable-rate loans are gone, and the only buyers out there today are too educated and observant to fall prey to the same garbage that allowed the housing Ponzi Scheme to escalate in the first place.

The last thing realtors, lenders, and especially sellers want is an educated populace, but that's where we are today. And individuals brave (or foolish) enough to try to sell in this disastrous environment are learning all too quickly that not only is the pool of buyers savvy and in the power position, but tightening lending standards and a reintroduction of common sense mean that pool is shrinking fast.

It was much easier to sell when lending allowed otherwise unqualified buyers to suddenly compete, adding to an already crowded buyer pool sold on the prospect of perpetual real estate appreciation. In those days undesirable properties, priced 10% above local comps, were getting multiple bids and selling above their ridiculous asking prices.

Those days are gone, and the smart sellers saw that coming, priced aggressively, and got the hell out of Dodge. As they say, better to sell a year early than try to sell one day late.

However, those who haven't sold and are still sitting on their value-deficient properties are too late to save their financial future. They just don't know it yet.

Oh, sure, some are making small price cuts (more like paper cuts) thinking they're just about to hit the pricing sweet spot and nab a sale, but they have no idea that it will not be enough. The ability to get out for a profit passed them by years ago. The break-even opportunity went up in smoke a ways back. The chance to unload a property and only pay realtor commissions is long gone. And the proposition that they could get out minus their downpayment, commissions, and a $15,000 check has vanished like a fart in Jupiter's orbit.

You see, whether sellers recognize it or not, in this market the only thing that will snag an articulate, smart, financially solvent, educated buyer is Pain Pricing.

If a seller is serious about unloading their debt-trap, and isn't just one of these numbskulls slapping a wishing price on their home in the hopes some time-traveler from 2004 will come along and have no regard for how overpriced it is, they are going to have to price to the point where it causes them severe pain: financially, emotionally, and yes, physically.

Just ask the seller of today's property:

Address: 2420 East 4th ST #4, 90814

Asking Price: $290,000
Size: 2 bed, 2 bath (1,077 square feet)
$/Sq. Ft.: $269
Year Built:1956
Purchase price: $405,000 (Jesus! Have you ever taken a math class?)
Purchase date: 8/2005
MLS#: P574952
On Redfin: 293 days (Hurry, this won't last!)

Description: Located in the Carroll Park Historic District, 4 blocks to beach, 1/4 block to Portfolio & 4th st Arts/Retail, this 2 bd/2ba classic 1950's upper condo has 1077 sqft, hardwood floors, full height windows in living rm & dining rm. The home has orignal color tile in baths & a master walkin. Both bdrms are oversized. Corner unit w/ windows on 3 sides. 4 blks to beach/bike path. Perfect for discriminating buyer who desires a 50's retro condo in a historic district Largest floor plan in complex.

This "historic district" stuff is hilarious. What's funnier is they mentioned it twice. I'm seeing it more and more recently. Like this is a brownstone in Georgetown or a civil war house in Annapolis, MD. Dude, it's a 50-year-old dump in Long Beach. Hardly enough to get the Preservation Society on the phone.

The "retro" descriptor is also amusing. Other words you could use, were you in the business of telling the truth include, "older than sh*t." Just take a look at the bathrooms. "Orignal" toilets and tile ain't retro, that's just decrepit. And I'm sure the failure to replace those ancient fixtures was all about a commitment to preserving the "historic" aspects of the property. Yep, had nothing to do with a crushing $2800 monthly payment.

As you can see by the absolutely horrendous interior, this idiot way overpaid.

Exhibit A, for the jury's consideration:

Exhibit B, your honor:

At the original asking price of around $400,000, the bare minimum to play is upgraded double-paned windows, central air/heating, stainless appliances, granite countertops, and remodeled bathrooms. I don't see any of that, just a lot of ugly, ugly, ugly.

Really, this is "perfect for a discriminating buyer"? A discriminating buyer wouldn't touch this place for anything over $200 per square foot.

Speaking of square feet, at 1077, it makes me think the claim that "Both bdrms are oversized" either means A) to Gary Coleman, or B) the rest of the house is severely undersized.

Plus, this place is straddling a busy street, has only one parking space (sorry wifey, sling that Saturn on the street tonight), has shared laundry facilities...I mean, just what was this person thinking pricing at $400,000?

They were thinking they could get out without any noticable pain.

But now this seller knows that's not even remotely possible and he's implementing, and embracing, Pain Pricing. Let's look at the history (by the way, one glance and it's no wonder this P.O.S. has floundered on the market for almost a year).

May 01, 2007 - $398,900
Jun 04, 2007 - $349,900
Jun 28, 2007 - $339,900
Jul 31, 2007 - $329,900
Nov 06, 2007 - $328,000
Feb 01, 2008 - $290,000

A $38,000 haircut in the last few weeks and still no takers. If this poor sap finds a knight in shining armor tomorrow and gets his asking price, he stands to lose a mind-blowing $127,400.

Maybe you're a trust fund baby, but where I come from $127,400 is a lot of money. And losing it would be excruciatingly painful.

All I want to know is how on earth, under any circumstances (even circumstances fueled by irrational exuberance and promises of unending real estate riches), could purchasing this place for $405,000 have mapped out financially using even the most rudimentary calculations? Didn't they check the Grunion Gazette for local rents? Doesn't this person have friends? How about their real estate agent, who serves as the buyer's advocate? Where were they?

Not that I expect much honesty out of someone whose livelihood depends on me spending the most money possible (would you expect the server at La Opera to tell you the $9 bottle of Shiraz is just as delicious as the vintage La Fete?), but this person will be left in financial ruins by the time this fixer mercifully sells.

Saturday, February 16, 2008

Wanna Bet?

Sorry for the lack of posts lately, I've been on the road for work. During my travels, I happened to end up in the epicenter of real estate hell: Phoenix, Arizona.

That place is a Real Estate Disaster Zone, and it started imploding in 2005--long before the housing bust we're experiencing in OC and LA. By some accounts, the Phoenix meltdown is just getting started, indicating a longer, more painful return to reality in store for California.
Phoenix was one of the first bubble cities, along with Sacramento, San Diego, and the entire state of Florida. House values had V-2 Rockets strapped to them, and a bidding frenzy drove prices beyond what the local income could sustain.

First in flight, first to land. And the news from Phoenix indicates this was a crash landing and there were no survivors.

All of the phantom appreciation has evaporated and people suddenly realize that, unlike what their realtor told them, it wasn't going to last. So now capitulation has set in, and homedebtors scramble to unload their rapidly depreciating money pits for 50 cents on the dollar, or get foreclosed on due to buying beyond their means, or they simply walk away. This deadly cocktail of real estate poison results in ballooning inventory and drastically reduced prices, fueling even more panic selling, foreclosures, and walk-aways.

But you have to give Phoenix credit. At least they've woken up to the brutal economic realities of the post-housing bubble environment.

Long Beach, on the other hand, is pretending as if the housing bubble hasn't yet burst.

Take a look at this chart:

This is a list from CountryWide detailing what they determined are the highest-risk markets for issuing home loans currently. Right there at the top is Phoenix coming in at Category 5. Nobody denies that the Phoenix market crashed spectacularly, not sellers, not the media, and not even realtors.

But keep scrolling down that list. Well, what do you know, LA/Long Beach/Glendale is a Category 4. But wait a minute, I thought Long Beach is special. LB is a city of communities and house prices are immune to the national housing crash, right?

You would think so given the pricing strategy of this crack den:

Address: 1182 E. 9th Street, 90813
Wishing Price: $315,000
Size: 2 beds, 1 baths, 600 sq. ft.
Year Built: 1923
$/Sq. Ft.: $525
Purchase price: $285,000
Purchase date: 7/2005
MLS#: S499815
On Redfin: 196 days
Down Payment: $31,500
Monthly Payment (Principle, Interest, Insurance, Taxes): $2100
Income Requirement: $78,750

There are so many things wrong with this listing, and frankly, it pains me to make fun of the mentally handicapped. I'm serious. How else can you explain the delusion dripping from this ALL CAPS MANIFESTO? However, nobody said exposing Long Beach sellers for the delusional, misguided, greed-heads they are would be easy, so here goes:

First, there are prison cells with more expansive square footage. This place is so unbelievably small that I'm unconvinced it's meant for human habitation. At least adult human habitation. Could you imagine dumping your life savings into a house and then having to buy two murphy beds just so you can move around? If the American Dream of homeownership involves living like this, then I'm moving to the slums of Brazil for a better quality of life.

Anyone care to guess why they have 47 pictures of that revolting "coffee table"? I'm guessing to show off their creative storage solution for all that crack they're smoking.

Look how small that bathroom is! You can poop, brush your teeth, scrub the tiles, and shower all at the same time!

Let's try to assess the level of mental illness by analyzing the seller's listing:


LOOK AT THE PRICE REDUCTION!!! (I'm looking. Should I be impressed? It's still overpriced, as evidenced by the 196 Days on Market. You need to come down another 40% or languish on the MLS for another 196 days, Oh, I forgot to add, !!!!!!!!!!!)

TRUE PRIDE OF OWNERSHIP ON THIS ONE!!! (Really? You mean from the seller with so much "pride" that they're desperately slashing the price to try and get rid of it? Or the "pride of ownership" the new buyer will feel as he spends more than a $300,000 dollars on a 85-year-old, tear-down roach motel that he'd be ashamed to invite his friends and family to? Oh, I get it, the "pride" of owning in this wonderful neighborhood, as evidenced by the security bars on all the windows.)

CHARMING HISTORIC BUNGALOW (1923). (I guess "historic" is the new euphemism for "Really F*cking Old")

THIS BEAUTIFULLY UPGRADED 2 BEDROOM HOME FEATURES: REFINISHED HARDWOOD FLOORS, NEW TILE FLOORING, NEW PAINT INSIDE AND OUT, ORIGINAL HISTORIC DECOR, ATTACHED GARAGE AND PRIVATE BAMBOO-SCREENED BACKYARD. (Are we even talking about the same house? Where is this "Beautifully Upgraded 2 bedroom" you speak of? All I see is a miniature haunted house with a nearly 100-year-old kitchen. Wait, that's a garage? It's so small I was sure it's where the rats park their scooters)


NO MELLO-ROOS OR ASSOCIATION DUES! (Hallelujah...I found it: The dumbest f*cking statement in a real estate listing. Really, no Mello-Roos? THIS HOUSE IS ALMOST A CENTURY OLD! MELLO ROOS DISTRICTS WEREN'T ENACTED UNTIL THE LATE 70S! And regarding the Association dues, are you sure? Judging by the pristine condition of this masterpiece and the paint schemes that match the burglar bars to the house trim, I thought for sure a diligent HOA was behind this kind of immaculate preservation)

JUST A FEW BLOCKS FROM THE BEACH & DOWNTOWN. (Well, I guess that all depends on how well you can read a map. They're clearly not counting on selling to people with that kind of expertise because unless those "few blocks" are half-a-mile each, this dump is nowhere near the beach.)

This type of ignorance and greed just makes me sick and it makes me want to buy elsewhere. On the one hand, I understand. This seller obviously overpaid in 2005 and they are obviously having a tough time accepting that they're going to be financially ruined by the end of this.

Everyone must be wrong, right? The housing market can't possibly collapse in just two year's time, can it? My realtor and lender told me if I didn't buy now I'd be priced out forever, and that if I ran the numbers to see if this purchase made any kind of financial sense, I'd only be wasting valuable time. I'm too smart to end up financially ruined. There's no way I'll end up like one of those sub-prime losers I read about in the paper. My situation is different.

Long Beach is different.



The only way to protect themselves from utter despair is to put up a psychological barrier, ignore the overwhelming signs of impending doom around them, and price it according to profit, not reality. Is it any wonder this place has dwindled away on the market for almost 200 days? The price is outrageous.

The willful ignorance of Long Beach sellers will get them through a few more months of insane pricing strategies but as inventory stacks up, sales decline, the Spring Bounce never materializes, the "Stimulus Plan" fails to make a dent, and the only people selling are those who chop prices significantly to meet the dismal economic realities, LB sellers will eventually give in to the same grim reality that their Phoenix brethren have painfully accepted.

I am going to make a prediction: This rat hole will not sell at $300,000, $250,000, or $200,000. In my estimation, this little gem won't so much as get a backup offer for anything more than $150,000. You may think that's a dramatic position, but I'll put my money where my mouth is: I'll put $1,000 on it. Any takers? Before you place that bet, let's take a peek at the sales history:

Jan 08, 2001 - $69,182
Apr 10, 2001 - $68,000
Jan 04, 2005 - $208,000
Jul 26, 2005 - $285,000 (Holy crap, that last seller made out like a bandit! He cleared like $60,000 just for holding onto this P.O.S. for 6 months! Housing bubble, anyone?)

Prices in Orange County and Los Angeles have already dropped past 2005 levels with no sign of slowing. In cities that experienced the bubble earlier than OC and LA, like Sacramento, the Inland Empire, and San Diego, many prices are well below 2002-2003 levels. And those price drops are for nice properties. So, looking at this crap shack, if you think this seller will unload it for anything above $150,000, let's place a friendly $1,000 wager.

Just because this seller's financial outlook is bleak, it doesn't mean mine has to be.

Saturday, February 9, 2008

Glory Daze: UPDATE

Great news, party people! Reliving your collegiate prime just got a little more affordable. The TKE house in downtown Long Beach reduced its price from a psylocybin-mushroom-chomping $569,000 to a 3-foot-bong-smoking $539,000.

Let's look at the pricing activity of this tear-down pig's pen:

Aug 30, 2007 - $649,000
Sep 20, 2007 - $615,000
Oct 27, 2007 - $569,000
Jan 17, 2008 - $539,000

Unfortunately for the seller, despite their genuine effort at making this place more fiscally palatable, this pattern of price cuts haven't made a damn bit of difference.

And the recent $30,000 haircut won't move this place either, but at least it demonstrates a degree of seriousness. Of course, in this crack-house neighborhood, it's going to need a higher degree of determination, translating to much larger price cuts.

And it's certainly not helping that those same horrendous, and frankly embarrassing, pictures are still included in the listing. I mean, come on, at least throw away the g*ddamn beer cans before taking MLS pictures. What? You haven't had enough days on market to sort that out?

What exactly to realtors do to earn their ridiculous commssions? In this case, it's clearly not SELLING HOUSES.

I guess realtors could just blame the sellers for not pricing aggressively, but isn't it a realtor's job to advise their clients about minor, tiny, technical oversights such as, you know, OVERPRICING A BORDERLINE-CONDEMNED TEAR-DOWN IN A TERRIBLE NEIGHBORHOOD WHILE THE HOUSING MARKET COLLAPSES AROUND THEM?!

If you look at the August wishing price (right at the time of the credit squeeze) compared to today's price, it demonstrates a $110,000 total price cut. I hate to break it to this seller, but with this property, in this market, considering these lending standards, factoring in the newfound education of buyers, I'd guess it's going to take two more $110,000 slashes before this even gets a second look.

That's a lot of money, right? Sounds crazy, I know.

But it's worth noting that none of the properties I've featured on this site have sold despite price reductions. Furthermore, the negative, venom-spewing comments from perma-bulls, commission-starved real estate "professionals," and others have STOPPED DEAD, indicating a acceptance that this was in fact a massive housing bubble and that we're in for a significant fall in prices.

But don't rely on my calculations alone. Crack a newspaper (except for the Long Beach Press-Telegram, which is doing a pathetic job of covering the worsening housing environment), watch the news, or look at DataQuick's newest report on the plummeting median home price...and you'll quickly see why the hate mail has stopped. Capitulation.

The market is going to return to fundamentals, and I'll be happy to give a hard-working, aggressive, knowledgable realtor a 6% commission for finding me the perfect home. And soon after that the market will improve and hopefully with the knowledge we've gained from this and other sites.

Friday, February 8, 2008

Hide and Seek: UPDATE 2

I promised I would keep tabs on our MLS-manipulating friend over at 1055 Orizaba. If you recall, my first post on the property concluded that at the $310,000 asking price...

These are going from “Ridiculously overpriced” to just “Overpriced.” However, after crunching the numbers it becomes clear these units will play MLS-peek-a-boo with no sale for a while. As the seller is now painfully aware, significant price reductions are in order to sell less desirable properties in this market, and almost $400 per square foot is fantasy pricing.

Well, friends, I hate to say I told you so. The price for Unit #5 has been reduced from $310,000 to $299,000--a nice little $11,000 haircut.

This is significant not only because it is the first attempt at a price reduction this year, but because it represents capitulation to the economic realities at play, and demonstrates a bitter understanding that the party is officially over and the only people selling are the ones slashing prices.

Now, put yourselves in the shoes of the suckers--er, homeowners who paid full price for these apartments. How do you think they feel knowing that their condo, if they tried to sell today, would list at 10, 20, 30 or even $60,000 less than what they paid just a matter of months ago (Remember, units like these were priced around $350,000 last summer)?

They would feel devastated. In fact I bet it feels so lousy that if they put very little down, or have an interest rate reset around the bend, or if they suddenly realize they bit off more than they could chew (or a combination of those factors), they would have very little incentive to keep making payments on their overpriced condo in a 30% unoccupied building.

What happens when incentive to honor a financial commitment vanishes?

Homeowners: Can't pay? Just walk away
More and more borrowers are watching their house values sink while the cost of their loans skyrockets. What to do? Skip out on the mortgage all together.

NEW YORK ( -- Mortgage payments are set to jump. Home prices have plunged. "I'm outta here."

Homeowners are abandoning their homes and, more importantly, their mortgages, rather than trying to keep up with rising payments on deteriorating assets. So many people are handing their keys back to lenders that a new term has been coined for it: jingle mail.

"I stopped paying my mortgage in October, after shelling out about $70,000 in interest [over 15 months]," said one borrower, David, who doesn't want his last name used. "Now, I'm just waiting for the default notice."

Current lending practices have created an environment where a measure as extreme as abandoning a home actually makes sense to some people.

Many buyers put little or no money down, so they don't have much invested in them. That leaves them with little incentive to keep making payments when a home's market value dips below the balance of the mortgage.

* * * * * * *

If this trend catches on, and recent media coverage indicates it is, a year from now you'll be able to swoop up two of these condos in a Buy-One-Get-One-Free for the current asking price.

Wednesday, February 6, 2008

A Tale of Two Cities

As the real estate bubble violently bursts, some communities are left in shambles. Just look at parts of San Diego and Sacramento. Those cities were the first to experience the real estate bubble, so it only makes sense that these areas would be the first to collapse under the weight of their own misguided expectations of perpetual appreciation.

Orange County has been hit particularly hard, as sales have slowed and prices have dropped considerably just in the last six months. As more and more foreclosed and short-sale properties come on to the scene, asking prices dip, drop, and plunge until a sale is mercifully reached.

Unfortunately, although Long Beach also experienced unprecedented price inflation, many sellers didn’t get the memo about the ensuing housing crash. Because of that, some sellers’ pricing strategy is stuck in the halcyon days of unending appreciation and the belief that selling their piss poor properties should amount to hitting the lottery.

The very premise of this site is to expose the insanity behind Long Beach pricing in comparison to much nicer, more desirable areas in LA and Orange County.

Our first featured property is a 3 bedroom, 2 bath townhome in Huntington Harbor. Huntington Beach is one thing, but Huntington Harbor is the Belmont Shore of HB. Not only is this area of Orange County superior to Long Beach as far as schools, median incomes ($78,768!), cleanliness, and crime rate, but it is also in a great location relative to the beach, the harbor, and, well, it’s in Orange Freaking County.

Address: 16542 Blackbeard LN #101, 92649
Asking Price: $275,000
Size: 3 beds, 2 baths, 1,272 sq. ft. (built in 1980)
$/Sq. Ft.: $216
Purchase price: $136,990
Purchase date: 4/1998
MLS#: S505057
On Redfin: 147 days
Description: Immaculate, Highly Upgraded/Remodeled Ground Level Unit. Elegant Imported Italian Limestone Flooring Entry, Kitchen, Dining Room & Hallway. Scraped Ceilings, Recessed Lighting, Crown Moulding, Custom Paint. Master Bdr has Bose Surround Sound Included in Price! Completely Remodeled Master Bath, Inside Laundry, 1-Car Detached Garage. Very Private, Gated Community w/ Ponds, Fountains, Community pools, Spas, BBQ's & More, Only 1.5 Miles From Beach! Won't Last!

Hurry! According to the description this “Won’t Last!” Hmmm. It seems to have lasted for 147 days on the market, so I am fully confident in its staying power.

As you can see, this is a really nice place. This could be the nicest condo I've ever featured on this site. Other than the original kitchen, this townhome has been nicely upgraded, especially the bathrooms.

The only major drawbacks I see are that it’s in a huge condo community (180 units) and the HOA fine—er, fee is $400 per month. OUCH! Too bad you can’t write that off. That’s almost 5 Grand a year flushed down the toilet ($180,000 over the life of the loan! Wrap your head around that one for a second!).

Nice pool though!

Despite the faults, which every property has, I don’t think there’s any doubt that this is an attractive place in an attractive area. The price is still too high, judging by the days on market, but at $216 per square foot, it’s extremely competitive considering the upgrades.

The relatively low price can be attributed to the fact that this seller purchased back in 1998, before our recent once-in-a-lifetime real estate bonanza, for $136,990. As noted in my post yesterday, an owner with equity has a lot more room for price reductions than you do, and in addition to foreclosures and short sales, they pose a significant risk to neighborhood comps. Look out below!

Now let’s look what that same $275,000 gets you in Long Beach:




A 1200 square foot 3 bedroom/2 bath under $300,000 doesn’t even exist in Long Beach. You my friend, are eligible to buy in Huntington Harbor, but you are priced out of even the most ghetto neighborhoods in LB. Blows your mind when it's put that way, doesn't it?

However, if we lower our square footage requirement, a few gems pop up on our radar. Like this one:

Address: 1509 Stanley #108, 90804
Asking Price: $249,000
Size: 3 beds, 2 baths, 1000 sq. ft. (built in 0000)
$/Sq. Ft.: $249
Purchase price: $385,000
Purchase date: 11/2006
MLS#: P611732
On Redfin: 70 days
Description: Make an offer today!!! Seller needs this sold now!!! Willing to look at all offers. Unbelievable 3 bedroom 2 bath in this relatively new condo conversion. Great building with a beautiful courtyard, and 2 parking spaces available. Balcony available for outdoor space, and with a little TLC you can save thousands.

So, let me get this straight. This is a tiny fixer upper with no upgrades in a terrible neighborhood, miles from the ocean, and they’re asking $250k compared to Huntington Harbor’s $275,000? Sure the HOA penalty is a third of our Huntington Harbor condo (with no pool or gym it should be less) and it’s slightly cheaper to buy (FYI, they were asking $280,000 in December), but where would you rather live?

If you say "this place," then you're either a really bad liar or you need to be removed from the gene pool IMMEDIATELY.

Someone please explain to me why Long Beach is so special and why its sellers act as if their market is immune to economic realities. I want nothing more than to live in Long Beach, but at this rate it looks like clean, beautiful, safe, prosperous Orange County is the CHEAP alternative. Next stop, bizarro world.

I can already hear certain commission-dependent visitors to this site saying, “But Orange County has more land, so it’s not fair to compare big, gorgeous, sprawling condo communities to condos in Long Beach—you have to compare OC condos to LB houses!” Um, okay. Here we go:

Address: 636 E 7th St., 90803
Asking Price: $310,000
Size: 3 beds, 2 baths, 1050 sq. ft. (built in 1913)
$/Sq. Ft.: $295
Purchase price: $130,000
Purchase date: 10/2000
MLS#: M08017417
On Redfin: 1 day (Hurry! This won’t last!)
Description: Fantastic house in excellent condition, best house in the area, with ceramic tile flooring, and overall in very good shape, long driveway, only 10 blocks to the Marina and Shoreline Drive, Must Sell!!!!!

Short but sweet. I guess the description is encouraging us to read between the lines.

Fantastic house in excellent condition (Sounds great! Can I see some pictures of this house you speak of?)

best house in the area (Sweet Jesus, if this is the best this area has to offer, a nuclear bomb must have gone off in this neighborhood)

with ceramic tile flooring (And there’s your one upgrade in the entire house. Enjoy!)

overall in very good shape (They couldn’t even bring themselves to take the laundry off the bed or tidy up the rooms before taking pictures, and you’re going to trust them about the “overall” condition of this ancient homeless shelter? Plus, “overall” is a hedge word that implies “kind of.” What are they not showing us?)

long driveway (You’re going to need it because otherwise you’ll be fighting for a parking spot along one of the busiest streets in Long Beach)

only 10 blocks to the Marina and Shoreline Drive (10 of the most dangerous, filthy, crime-ridden streets you’ve ever walked in your life. I’d rather walk 20 blocks in Baltimore. I used to live in this area, and there is NO WAY you’re walking with your family to the Marina)

Must Sell!!!!! (Look at the size of our flat screen TV!!!!!!! We’re financially f*cked!!!!!!!!!)



My God, is this a prank? Ashton, where you at, man?

This place is an absolute dump. They live in filth and these are the people you want to buy a house from? Need I remind you this place is $35,000 more expensive than the Huntington Harbor property (or just about any other Huntington Harbor condo—not just our equity-rich seller’s place). Have I made my point clear?

Long Beach is living in fantasyland. There is no other explanation for the Wishing Price behind this 95-year-old, borderline-condemnable rat hole that sold just seven years ago for $130,000.

The point of this post is that Long Beach has not received the memo about the status of Southern California real estate. These informational and psychological barriers will come down, whether delusional Long Beach sellers like it or not. But my hope is that Long Beach stops fighting reality sooner than later, lest they further humiliate themselves with their offensive and frankly hilarious pricing strategies.

As people, with the help of blogs like mine, come to understand just how out of alignment Long Beach prices are with rents, local median incomes, and with much more desirable cities, the slowing sales will come to a grinding halt as they figure out how much more house, quality, security, and financial benefit they can get in less expensive communities like Huntington Harbor (Man, it’s strange to discuss LB and refer to Orange County as “less expensive,” but that’s where we are today). When that happens, Long Beach prices will undergo a severe correction just like LA and OC, and will return to basic economic fundamentals--suddenly and violently.

And my fellow intelligent, informed buyers will join me in swooping in on their distressed properties for dimes on the dollar.

Or maybe Long Beach sellers will redouble their commitment to ignorance and two years from now we’ll just end up choosing a “bargain” community like Newport Beach.

P.S. Readers, your challenge today is to find a Long Beach property as nice as the Huntington Harbor property for under $300,000. Hell, make it $315,000. Come on, prove me wrong.

Tuesday, February 5, 2008

Bottom Feeders and Bottom Chasers

Although many people clearly don’t get it, or purposely choose to bury their head in the sand, by now it is indisputable that this is a terrible, horrendous, dreadful, suicidal time to sell a house.

I’m still waiting for our friendly visitor newquest, who attacked me because I apparently "have no idea what your [sic] are talking about," to post data proving otherwise.

Still waiting…

Anyhow, there are many reasons to sell in a catastrophically declining market: Divorce, interest rates resetting skyward, job relocation or loss, retirement, medical emergency, etc. All are legitimate reasons to defy common financial sense and just sell the damn thing at any price. But what all of these unfortunate circumstances have in common is a virtual guarantee that the seller will lose money on their investment.

Property owners who made sure rent vs. buy calculations lined up before buying have the option to rent their place out for positive or break-even cash flow while they go back to renting and try to improve their situations.

Everyone else, I’m afraid, is in for serious financial pain, or in some cases absolute fiscal annihilation.

As I covered in Comp Killers, one of the most significant dangers of selling a house in an ever-growing field of depreciating assets is a neighbor who needs to get out of their money pit more than you do. This could be an individual who bought in the last down cycle who has plenty of equity; they can afford a larger financial haircut than you can. For example, a retiree who would rather cash out and buy a Winnebago than wait 10 years for the market to go back up will be more motivated to undercut competing prices to ensure a sale.

Or it could be a bank who needs to get rid of their recently repossessed home pronto because of pressure to get keep the growing number of foreclosure and short-sale liabilities off their books. U.S. banks and mortgage holders have enough problems to contend with and certainly don’t need to enter the property management business.

Either way, once that house sells at auction or at a dramatically reduced price, a seller's competition just got stiffer and a big chunk of their rapidly dwindling equity just evaporated.

There are several kinds of financial punishment in a situation like this:
Lucky individuals get out in time to break even, before all the bank-owned properties inundate the market.

Not so fortunate souls only lose their down payment and have to start from scratch.

The truly pitiful lose their down plus any equity they’ve built up over the years. In some cases they actually lose their down and equity and STILL have to write a check for 15 to 20 Large to cover selling costs.

And then we have the financially ruined, guided by a sense of greed and entitlement. Some sellers flatly reject what they consider “low-ball” or “bottom-feeder” offers because they mistakenly believe they deserve more for their little plot of heaven. After all, their home is "special" and surely commands a premium over the hundreds of listings in the surrounding areas. So they ignore the surrounding market realities and only gradually lower the price. But the market stays one rung below them on the downward ladder. This is called “chasing the market down” and it is a vicious, unrelenting cycle.

As the market continues to collapse around them, they slowly realize if they had just priced their home competitively from the outset they would already be rid of the python around their neck. Most painfully, it dawns on the beleaguered seller that what they scoffed at as a “bottom-feeding” offer was their last opportunity to get out with the least amount of pain and financial penalty.

The seller’s snotty, indignant rejection of that “low-ball” offer was their greed-fueled, agonizing downfall, and one that will haunt them as they retreat from the enterprise of homeownership, hoping that their freshly devastated credit rating won’t follow them like a shadow to their new rental apartment.

Which brings us to this poor chap:

Address: 1100 Walnut #5, 90813
Newly Reduced Price: $279,000
Size: 2 beds, 2 baths, 890 sq. ft. (built in 1986)
$/Sq. Ft.: $314
Purchase price: N/A
Purchase date: N/A
MLS#: P558387
On Redfin: 372 days (Happy belated one-year anniversary!)
Description: Vaulted ceiling and a skylight in the living area lend dramatic dimension to this beautiful condo conversion. Asian cherry hardwood floors in living, dining & kitchen area, ceramic tile in baths, wall to wall carpeting in the bedrooms. Stainless steel appliances & in-unit washer/dryer combo unit included. 2 parking places in gated community garage. Pet friendly building, 2 dogs or 2 cats or combination. 5 Minutes to freeways, Blue Line and Long Beach Airport.

Stainless steel, you say? Prove it!

Nice, me more!

Okay, I believe you. Now how about a look at the guest bathroom?

Uhhh, okay. I get it. Stainless steel, roger that. I think the appliances are covered. Let's see some photos of the guest bedroom...

I guess they're really proud of their taste in Sears appliances?

Anyway, the funniest part of this listing is the erratic pricing activity during their desperate chase to the bottom:

Feb 03, 2007 - $339,500 (A bold start at $381 per square foot. Helloooooo Irvine!)
May 03, 2007 - $327,500
Aug 08, 2007 - $327,250 (Wow, a whopping 250 bucks off. I mean, why even bother?)
Sep 11, 2007 - $327,000 (Another paltry $250? Why not throw in a Netflix gift card instead?)
Sep 18, 2007 - $324,500
Oct 25, 2007 - $309,900
Oct 31, 2007 - $299,900
Nov 28, 2007 - $285,500
Dec 08, 2007 - $299,500 (A $14,000 INCREASE! Must be a stainless steel toilet somewhere)
Jan 12, 2008 - $279,900

So, after all of those pricing shenanigans, we’re left with an asking price almost $60,000 less than the original, delusional demand.

This property isn’t much fun to profile because we don’t know how much they paid. Judging by their bold (read: dumb) pricing strategy one could assume they bought long ago and have equity to burn. Then again, granite counters and stainless steel skinned appliances aren’t free and I’ll bet they refinanced at some point and used some equity for improvements. Any readers out there know the backstory with this place? I’m dying to know what the deal is.

Shockingly, even at this seemingly “low” price, we’re not even close to parity with local rents. And considering this place is north of Cherry east of 10th Street—each demarcations for no-man’s land by themselves—I can’t imagine many people subjecting themselves to such a questionable neighborhood for $300,000.

Not to pile on, but it's small for a 2 bed/2 bath, has two common walls, and your $260 per month HOA fee doesn’t include a gym, a yard, or a pool. Think about that for a minute.

Even if the price dropped precipitously to $200,000, it STILL wouldn’t align with local rents. These aren’t exactly comparable, but it’ll give you an idea:

Yikes! Unless this seller bought in ’91 and has incredible amounts of equity, chances are they are already upside down. That means they will eventually hit their financial breaking point, the price reductions will stop and the bank will take it back.

I guess he could just pull it off the market and live there until the market regains its pulse. But given the fact that this sap is still trying to sell in this brutal—and quickly deteriorating—market means this place has one word written all over it:


Assuming you would live in this neighborhood, what would you offer on this place?

Saturday, February 2, 2008

That Haircut Looks Great on You!

It’s a new month in a disastrous real estate environment. Do you know what that means?


Address: 282 Redondo #302, 90803
New Asking Price: $380,000
Size: 2 beds, 2 baths, 1,026 sq. ft. (built in 1986)
$/Sq. Ft.: $370
Purchase price: $445,000 (Yikes!)
Purchase date: 1/2006
MLS#: R800119
On Redfin: 29 days
Description: Awesome 90803 Condo at a great price! Laminate floors, designer paint, stainless steel appliances (included!), stackable washer/dryer (included!), scraped ceilings, romantic fire place in the living room, balcony, separate dining area off of kitchen. Central air and heat, pool, spa and rooftop sun deck! Walk to shops, dining and the beach, or enjoy the beautiful sunset from your private balcony - it doesn't get better than this! Come see and fall in love.

By the way, can we knock it off with the “designer paint” crap already? It’s up there with “gourmet kitchen” in the pantheon of Most Completely Useless Descriptors.

When this place first came on the market, the original listing price was $420,000. The newly reduced asking price of $380,000 represents a $40,000 haircut from just a month ago. Brutal!

But that’s not the most interesting part. Upon further inspection, it turns out this seller played his hand at property poker exactly one year ago, and purchased this place for an eye-popping $445,000. That means within 12 months the market had deteriorated so badly that they didn’t bother attempting to set a break-even price. They knew this was a money-losing transaction from the outset.

How much money? If this seller gets asking price, they stand to lose a staggering $87,000 including commissions. Wow.

Any equity in the place will vanish instantaneously, and if they didn’t put 20% down (which is virtually guaranteed since the loan was issued near the peak of dubious lending practices) they will have to cut a check for 10 to 20 grand just to walk away from it.

And it pains me to point out that those calculations are assuming this actually sells at its current asking price. This poor sap is in a world of hurt.

Down Payment: A 10% down payment would run $38,000.

Monthly Payment: Financing the remaining $342,000 at 6% would leave you with an approximate monthly payment (including property taxes, homeowners insurance, and a hefty $250 monthly HOA fee) of $2,700.

Income Requirement: Assuming a 4x income calculation, the annual household income required to buy this albatross would be $95,000. How many people do you know pulling in that kind of income that would consider this their dream home? You could argue that a couple working full time can put together that kind of money to live in a glorified apartment, but the wife is going to have to park her Civic on the street—this place only comes with one garage space!

Add to that the two common walls, the lack of upgraded countertops, the incredibly unimpressive kitchen, the original toilets, it’s overall odd shape and janky layout…and this place quickly runs out of selling points.

I mean, what were these people thinking? Almost half a mil for this place? Other than the ease with which the seller thinks you’ll “fall in love” with this loser, I can’t fathom why they would pay that much for this mediocre, incredibly unimpressive place.

The lone parking spot is pretty much a deal killer for me, but I’d be interested in this property as an investment because it’s in a great area and it’s a decent size. However, in order for this to make sense as an investment property, it would require a haircut more closely resembling a scalping. When you run the rent vs. buy calculation (which this ignorant fool clearly decided against), this apartment would have to come down nearly $100,000 to make financial sense.

Now you see why people are simply walking away from properties. This is only the beginning.