Here is the first post I wrote on this property: http://longbeachhousingblog.blogspot.com/2008/01/glory-daze.html and here is a comment from that post:
[When considering purchasing a rental property] Razing an old decrepit home and constructing a nice house or some rental units can be a smart investment—IN A NICE, UPCOMING NEIGHBORHOOD. This, I’m afraid, is not one of those neighborhoods. In fact, during my tenure, gunshots, car vandalism (the fact that quite a few cars are now parked behind a gate in the back yard tells me street parking still isn’t a good idea), homeless, and even car fires (!) were yin to cheap rent’s yang. I drove by for old time’s sake a few months ago and not much has changed.
And here was the second post in January discussing the $30,000 price drop:
http://longbeachhousingblog.blogspot.com/2008/02/glory-daze-update.html and here is a portion of my analysis from that post:
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.
Well, the seller lopped off an additional $40,000 last week and is currently asking for $499,000. What's funny is, if they had priced this tear-down at $499,000 in August of 2007 when it first hit the market (instead of their bong-a-licious $649,000 asking price) then they would have had a sliver of selling hope. But now, at 208 days on market, it might be too little too late.
By the way, the Long Beach real estate situation is playing out exactly as I predicted when I started this blog. I'm no fortune teller, I'm just a man armed with solid economic data, an understanding of basic market fundamentals, and the common sense notion that when LB is more expensive than Orange County and Los Angeles, there is some serious pricing correction on the horizon.
What do you think this party palace will sell for when it finally, mercifully does?