Wednesday, May 28, 2008

Happy (Almost) One Year Anniversary!

Address: 5585 E PCH #146, 90804
Asking Price: $259,900
Year Built: 1970
Size: 1 bed, 1 baths, 597 sq. ft.
$/Sq. Ft.: $435
HOA Fine: $193
Purchase price: $276,000
Purchase date: 2/2006
MLS#: H07082024
On Redfin: 359 days
Down Payment: $25,990
Monthly Payment: $2,000
Income Requirement: $65,000
Description: Fantanstic price and motivated seller. Great location towards the back of the complex. Sauna and Pool services are right there. Peaceful and pleasant complex and minutes from Cal State Long Beach, restaruants, beach, and shopping. Please see this property today.

First of all, congratulations on making it to a full year on the market! We knew you could do it!

I especially love the "Please see this property today" appeal at the end. Now that the Great Housing Scam is over and this property has gathered MLS Mildew for nearly 365 days, can’t you just hear the desperation in the realtor’s voice: “Plllleeeease see this property today! PLEASE!

By the way, Realtard, if this is such a “Fantanstic” price then why is it still rotting after a year on the market?

Further, if the seller is so motivated then why is the current asking price a paltry $2,100 less than the original demand from way back in the day? Seems a motivated seller would price aggressively and get the hell out of dodge instead of dicking around like this.

The answers to both of those questions is: Because this asshole overpaid for a crappy condo and will be financially obliterated if he reduces the price one more dollar.

You see, our home“owner” here bought at the peak of the market for $276,000 with absolutely no regard for market fundamentals or how out of line that price was with local rents.

His monthly payment, including HOA fine, taxes, insurance, etc. is $2,100, but a unit in the SAME EXACT BUILDING is renting for $1,150.

1 bedroom 1 bath condo located at PCH & 7th St., 1 block from VA Medical Center and 3 blocks from CSULB. Amenities include pool, jacuzzi, gym, game-room, cable TV, tennis court, A/C, heat, stove/oven, dishwasher, refrigerator, new carpet and paint, quiet unit with balcony, security building & parking. Rent is $1,150 per month plus security deposit. Credit check required. No pets allowed.

Whoops, it’s costing this fool almost TWICE to "own" what it would cost to rent an identically shitty unit.

Doesn’t this guy have a calculator? How about a frigging newspaper? There’s this thing called “The Classified Section” that lists properties for rent. Perhaps you've heard of it? One peek would have told you this transaction was financial suicide.

And these are the idiots the government wants to bail out? If morons like this get bailed out with my tax dollars, I’m demanding a government bailout to compensate me for that vintage truck I bought in 2006. The seller assured me it would go up in value and that if the project was too much for me, I could just turn around and sell it for a profit.** I lost money on it and now I’m demanding a bailout!! Please explain to me how that is ANY different.

Anyone? Bueller? Bueller?

I wouldn’t pay a penny more than $100,000 for this dump. How do I know it’s a dump? They’ve had at least 359 opportunities to update the listing, and there are three shots of the pool and no interior photos. Not a good sign.

100 Large is a generous appreciation from the 2001 (this decade, folks) price and that’s what it would take to pencil out as an investment property. That took me 3.7 seconds to calculate. Why was that so difficult for this guy to do? Wasn’t a trusted, knowledgeable, experienced realtor showering him with their expertise?

Oh, and to anyone contemplating making an offer on this place, be sure to check your comps (you never know if your realtor will actually do their job). You might be surprised at what you find:

One neighbor is undercutting the loser in #146 by 10% with no action for six months (purchased for $280,000):

And here’s one that’s 687 square feet selling for $199,000 with no takers (reduced from $268,000, by the way)

And on and on in this building. If you look on Redfin, this complex is like a drowning dog and the fleas are frantically (and futilely) trying to make an escape.

These financial failures should not be bailed out by the government for their poor investments, and I’m beginning to wonder if they’re intelligent enough to be allowed to continue sharing the same gene pool. Of which they have so generously included three photos.

**True story


  1. Excellent blog, I appreciate your work. I lived in downtown LBC from 1998-2003. I know many of these dumps you refer to. I came across your site from Dr Housing Bubble's link. Keep up the insightful investigative work and excellent narratives!!

  2. ex-lbc,

    Glad you found the blog! As you know, Dr. Housing Bubble's site is AWESOME--I check it everyday.

    A boatload of new properties just arrived in my Inbox (some real doozies in there), so expect some more venemous posts from yours truly.

    Regarding the property featured on this post: The condo was purchased just a matter of years ago for under $100,000--is there anything that could prevent a return to that price? People are very eager to call a bottom, but given the economic factors (including job losses, rampant inflation, energy/food costs) I can't think of anything that would prevent a return to 2000 prices on 1/1 condos.

  3. remember that HUD site I told you about?

    $170k for a small SFR in NLB
    Address: 135 East Mountain View Street, LONG BEACH CA 90805 (LOS ANGELES county)
    Price: $170,000


  4. Wowwwww! Freedom, do you realize what you've just done? You, my friend, just drove a stake into the hearts of the remaining true believers.

    To anyone who thinks we've hit a bottom and current/upcoming inventory will be absorbed just as soon as lending standards go back to "normal" (read: insane), your goose is cooked. These types of properties will continue to flood the market, putting further downward pressure on prices in surrounding areas. Period.

    This is actually a nice looking house. It's tiny and in North LB, but it's quite close to Bixby Knolls. My point is shit-water runs downhill, and this little house doesn't look much different than the snuff boxes in the Alamitos Heights area--it's only a matter of time before the impact of these HUD auctions is felt in the more desirable parts of Long Beach.

    Check today's post for tangible evidence.

  5. How about this new listing. Btw, love your blog.

    This is a comp killer in LB if I've ever seen one. Been watching for a while now (sorta have to wonder if this lister is looking for a bidding war too), but without further ado - -

    I think it still has a way to go to hit the bottom.