Long Beach Housing Blog's 100th Post!

Address: 1775 Ohio Ave #105, 90804
Asking Price: $217,500
Year Built: 1993
Size: 3 beds, 2 baths, 1,225 sq. ft.
$/Sq. Ft.: $178
HOA Fine: $353
Purchase price: $418,500 (!)
Purchase date: 5/2006
MLS#: P655706
On Redfin: 6 days
Down Payment: $43,500
Monthly Payment: $1,746
Income Requirement: $54,375
Description: This is a very desirable 3 BEDROOM condo within a great complex with an nice open floor plan. This is a true 3 bedroom, 2 bathroom condo with over 1200+ square feet that is move-in condition. Large kitchen that opens to living area, seperate dining room, master-suite with huge closets, central air and heating, etc. Huge oversized private patio. This is the best priced 3 bedroom condo in Long Beach. Won't Last!



You know the tides of the real estate market have turned when your price per square foot is HALF the monthly HOA fee!

With a $1,746 (pre-tax benefit) mortgage payment, this three-bedroom condo would be an okay deal for an owner-occupant (assuming you want to live right on PCH in a shady part of town). Most notably, two–bedroom units in this complex rent for around $1750, so you could potentially have a cash-flow positive investment (assuming you can find reliable renters who want to live right on PCH in a shady part of town).

It’s worth noting this mediocre, non-upgraded apartment sold for a mind-blowing $418,500 just two years ago. Now, trying to keep up with the bombardment of foreclosures and short sales on the MLS (not to mention the carnage within the same building), this poor sap is desperately begging for a paltry $217,500.

SWEET JUMPIN' JESUS.

The current asking price represents a $200,000 loss from the last purchase price and a 50% haircut once commissions are factored in. That’s gotta hurt!


Is it any wonder banks, investment houses, insurers, and even our own government sponsored entities Freddie Mac and Fannie Mae are going t*ts up at such a rapid pace?

Assuming this family made the median household income for this zip code ($35,063), that means a bank lent them money at nearly TWELVE FUCKING TIMES THEIR ANNUAL INCOME!

Even if we are to believe the former owners made twice the median household income, making them Rockefellers in comparison to their neighbors, that is still SIX TIMES INCOME!

I guess six times income isn't a problem if you don't have a car payment, a car insurance payment, or pay for gas. Also not a biggie if you don't eat groceries, use electricity, buy clothing, have a cell phone, or a social life. Six times income is also totally doable if you don't have children, credit card debt, student loan payments, or pay child support.

Enough of the bailouts already! It's obvious these banks absolutely, irrefutably, without any doubt in my mind, deserve to lose every. frigging. penny.

It simply amazes me that nobody, at any point during this transaction, from the (fraudulent) appraisal on to the stinky loan being repackaged and sold off to some clueless, faceless investors, stopped to think that something was amiss here.

I mean, don’t banks essentially manage risk for a living? Where were they?

I know I’m very bearish on this site, but the last few weeks have convinced me that it’s going to be much, much worse than anyone imagined. Assuming any of these Hail Mary actions by the Fed (“Ben, what do we do? Another huge bank is going bankrupt from writing bad loans to people who had no business buying a house!” “Hell, I don’t know—throw hundreds of billions of taxpayer dollars at it and hope everything works out.”) somehow miraculously stabilize the housing market, by the time that happens a U.S. dollar will be worth less than an Algebra II flash card.

The most terrifying thing about this whole mess is the appearance that nobody—I mean nobody—seems to have any idea what the hell is going on or what the hell to do about what they don’t know is going on. You have McCain making an inexplicably out of touch claim that “the fundamentals of our economy are strong” (and don’t give me that garbage about "he really meant the American workers are strong." Puh-lease), Treasury Secretary Hank Paulson pulling a Baghdad Bob by saying we can remain confident in the "soundness and resilience in the American financial system" despite the obvious carnage around him, and Senator Harry Reid straight up ADMITTING nobody knows what the hell to do.

I mean, can’t somebody at least pretend they’re doing more than just writing checks with our money and simply praying for the best? Can't someone in a position of power at least make some kind of effort to persuade us they have a basic understanding of economic principles?

These are scary times folks. Frankly, the idea of buying a house is no longer a priority for me. The word to live by during the next few years will be Survival.