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.

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