Friday, February 6, 2009

Back From the East Coast with a Quickie: UPDATE II

While some downtown sellers are snorting huge lines of delusion and raising prices amidst the worst employment news in 30+ years (and are too stupid to change the listing description proclaiming, "HUGE PRICE REDUCTION!!!"), some people are beginning to see the light:

In this post I updated you on a kick-ass loft that suffered from WTF pricing when it was originally listed in June 2008. The Housing Kool Aid buzz has slowly worn off, and now we're looking at an asking price nearly 20% lower than the original.

I'll recap so you don't have to look through all the old posts:

Jun 20, 2008 Listed $549,000
Nov 17, 2008 Price Changed $553,000 ("SHORT SALE APPROVED AT $553,000!" )
Jan 01, 2009 Price Changed $425,000
Jan 07, 2009 Price Changed $395,000
Feb 05, 2009 Price Changed $374,900

That right there is a beautiful portrait of what it's like to chase a horrendous market down. Each price reduction is like a David Beckham penalty kick right to the family jewels.

And, to reiterate my point about buying right now being a guaranteed rusty knife-catch, please imagine for a moment that you bought this place in November for $553,000. You would have lost nearly $200,000 in property value in TWO FREAKING MONTHS. Do you have any idea how long it would take you to build that value back up? We're talking 30 years just to break even on the place.

Or what if you bought on January 6th? If you just waited one day, you could have saved yourself enough money to buy a new car with cash.

Don't listen to anybody that tells you we've hit a bottom. Print out this post and carry it around with you if need be! Everybody is eager to call a bottom right now, but Long Beach properties like this are a prime example of why it makes very little sense to buy any property right now--especially one that diverges from basic investing fundamentals.

Considering the $175,000 bloodletting (in less than 90 days, mind you), let's update the listing and see how close we are to said fundamentals:

Address: 207 E Broadway #301, 90802
Asking Price: $374,900
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $286 (down from $422 last time we checked on it)
HOA Fee: $327
MLS#: S537137
On Redfin: 231 days
Down Payment: $74,980 (from $110,600)
Monthly Payment: $2,300 @ 5.5% (from $3,700)
Income Requirement: $107,000 (from $158,000)
Description: Gorgeous south and west facing corner unit loft in the Historic Insurance Exchange Building! True loft living with open loft layout, exposed ceilings, gorgeous blond wood floors and floor to celing windows with city views! Unique floorplan, over 1300 square foot footprint with 1.5 baths, master bath with dual vanity, jacuzzi tub and two person shower. Enjoy additional square footage and privacy from the custom built-out sleeping loft. Central AC and heat, private storage room, secured parking, gourmet kitchen with granite countertops and viking appliances. One of a kind loft in one of the most well designed and sought-after loft conversions downtown.

Nope, still no dice. No way this one-bedroom rents out for $2,300 a month.

So have fun chasing that market down some more, guy! We'll be sure to get you an ice cream cake on your one-year anniversary.


  1. I find loft living so interesting but on the other hand I wonder if it just gets weird after awhile. Have you ever known anyone who has lived in a loft - especially one with minimal walls?

  2. My wife and I drink too much to enjoy those stairs. We would be dead within a week!!!

  3. Anon #1,

    I know of one person with a downtown loft (way inland, like 8th Street) it's all brand new construction inside and although the walls are mostly brick, there doesn't seem to be any issues with noise. It's a great space (all spread out and open), but she way overpaid.

    Plus, it's nowhere near the beach and that's not really a neighborhood you want to leisurely stroll around.

    If unemployment gets worse, I worry about downtown crime and property values, which worked so hard to grow during the development and condo-conversion boom.

  4. Cool. Enjoy the majestic views of parking lots and the 24/7 sweet sounds of Broadway.

    LOL, Anon #2 beat me to it on the faux stairs.

    I dunno; maybe $1600-1700/month. Factor in the HOA, taxes, any additional insurance and a little reserve and that pretty much pencils out as sub-$200K. Downtown LB ain’t SOHO or Greenwich Village.

    aka 90803