Tuesday, October 14, 2008

Pine-ing for a Sale

Sorry for the pun-tastic title, I couldn't resist. Today's property is caught in a dangerous spiral of bottom chasing (and I don't mean the kind of bottom chasing you did in college).

Yellow light--CAUTION!!

I actually feel sorry for this seller. And for no other reason than my imagination has run wild and pieced together a story about the current loanowner. You see, something about this property leads me to believe this seller is an older, single woman on the verge of retirement.

The 1992 purchase date, the incredibly small floorplan, the lack of granite and stainless steel bling, and especially the outdated decor and artwork all lead me to believe this is a sweet old lady trying to offload her primary asset so she can move somewhere less expensive and live out her sunset years.

Unfortunately, either due to terrible realtor advice or ignorance of the new real estate market, she has been unsuccessfully chasing the market down for a gut-wrenching 174 days. Her fragile heart probably can't take much more of this.

Address: 801 Pine Ave #312, 90813
Asking Price: $259,000
Size: 2 beds, 2 baths, 870 sq. ft. (built in 1990)
$/Sq. Ft.: $298
HOA Fee: $227
Purchase price: $119,000
Purchase date: 12/1992 (near the peak of the last housing bubble. Ouch)
MLS#: P633411
On Redfin: 174 days
Down Payment: $51,800
Monthly Payment: $1,700
Income Requirement: $64,750
Description: BEST BUY DOWNTOWN!!!This is NOT a short sale!!! DESIRABLE 'PINE PLAZA'!!! Easy FWY access, walk to public transportation, the beach, restaurants, clubs.....Third floor NW corner location with only one common wall, quiet and private! Fireplace! New, full size washer/dryer and refrige included. Beautiful pergo floors-recently painted-no deferred maintenance here! Two parking spaces-secure building! Assoc. rooftop deck and spa.

Anybody else notice that uber creepy painting above the couch?

Let's go in for a closer look:


The German Shepherd is weird enough, but the twins from The Shining?? Creeps!

Now here's a great photo I'm glad was included. I mean, how much effort would it have taken to set up the chairs properly? Not that it would make it a more relevant picture, but it's the principle of it! How lazy can you be?

As you can see by the price reduction action, this lady has been steadily chopping the price every two months, only to discover she's woefully behind the curve:

Apr 22, 2008 - $344,000
Jun 27, 2008 - $319,000
Aug 14, 2008 - $299,000
Oct 02, 2008 - $259,000

You have to give her credit for at least acknowledging reality unlike some people we know (We're looking at you, 109 Park) and consistently reducing the price during the last six months. But the problem is she started with $344,000 WTF asking price. This lady has the advantage of 16 years of equity, which is great, but she's in grave danger of losing most of it unless she starts getting aggressive.

Take a look around, ma'am. This 691 square foot 1-bed/1-bath right next door is asking a mere $120,000. Yes, you have a 2-bedroom, but how on earth can you justify asking an extra $139,000 for one more bedroom and an additional 179 square feet? Nobody is going to pay $776 per additional square foot for those few extra squares!

Or how about this modern loft a few blocks away asking $230,000?

Here is a 1,000 square foot 2-bed/2-bath rotting on the market for 161 days with a STARTING asking price of $269,000. The price has since been slashed to $218,750 and still no takers.

Especially with credit tightening and unemployment on the rise, our featured seller needs to get below $200 per square foot just to stay competitive in this undesirable neighborhood. But that would require kissing an additional $85,000 goodbye!

Given the reluctance to get aggressive so far, I don't have much hope that will happen.

We all know 401(k)s are being wiped out across the globe, but it's easy to forget that sometimes a person's home is the bulk of their retirement. Which, in turn, makes sellers on the verge of retiring that much more cautious about "cutting more than they have to" in order to protect their nest egg.

It's a damn shame. And it's yet another painful lesson of the Great Housing Bubble.


  1. All work and no play makes Jack a dull boy...yeah..."the Shining" sounds about right. I looked at renting in this building when we first moved to LB a year and a half ago. The building has one of those old- school hotel style interiors with rotting carpet and stained walls. And the downstairs lobby was this very sparse and bizarre 80's pastel decor. The 2 bedroom we saw was okay, pretty clean and well kept, but really really small. And the whole pad was fragranced with au de Pine St. Given the location, it's hard to imagine anything in this building being quiet. Honestly, I wouldn't even consider it if she chopped the price by another 100k.

  2. Katy,

    The more downtown properties I profile, the more convinced I become that it's really not worth the investment to live down there.

    The only way I'd live downtown is if it was new construction facing the ocean, or a super modern loft.

    That's about it.

    And renting is one thing, but for buying? Dicey. For the money they're asking in the more respectable downtown buildings, I'm much better off buying on the "good" side of Junipero.

    "Au de Pine St."--HA!