Wednesday, February 4, 2009

Hello 2003 Pricing, Glad You Could Make it!

Address: 140 N Claremont Ave, 90803
Asking Price: $739,900
Year Built: 1925
Size: 2 beds, 1 baths, 957 sq. ft.
$/Sq. Ft.: $773
Purchase price: $899,000
Purchase date: 8/2005
MLS#: P662996
On Redfin: 96 days
Down Payment: $147,980
Monthly Payment: $4,000
Income Requirement: $211,000
Description: JUST REDUCED! REDUCED! $50,000. This is a great LOCATION, don't let the square footgage keep you away from seeing this Sunny and Bright Home on a Corner Lot just Steps from the BAY. This Unique Location has BAY VIEW from the Kitchen, Backyard and Sideyard. There's Nothing like it in the Shore. Not only do you have the Fantasic View, but the Owners have made Significant Upgrades, such as: Remodeled Kitchen with Stainless Steel Appliances, Copper Plumbing, New Mahonaney Wood Floors Throughout, Double Hung Windows with Low-E Insulated Glass, Remodeled Bathroom, Crown Molding, New Roof, New Awnings, Freshly Painted Inside and Out, Sprinkler System and last but not least a Security System. Property has a single car detached garage, but has room for 3 parking spaces. Because of this Location and the View, this Home has Great Potential for Adding on and Doubling your Value.

Honestly, I think this is the worst, laziest, most incredibly muddled, woefully error-filled listing description I’ve ever featured on this blog.

If I were to parody a “Typical Illiterate Realtor” and write a jokey listing description, I don’t think I could do a better job.

You’ve got inexplicably repeated words (“REDUCED! REDUCED!”);

Alarmingly capitalized words (“This is a great LOCATION.”);

Horrific misspellings (“footgage” “Fantasic,” “Mahonaney”)

And the pièce de la résistance of random, wholly unnecessary Title Case (too many examples to list).

Good God, man. Have you no pride in your work? Those 96 days haven’t blessed you with 15 spare seconds to have a fourth-grader skim over your sad little screed?

And as a closer we get this beaut’: “Because of this Location and the View, this Home has Great Potential for Adding on and Doubling your Value.”

Unless you add on four more stories and a Condor enclosure, I don’t see how this place could double in value anytime before 2040. I’ll give you three guesses who doesn’t get it…Go!

Ugh. Anyhow, back to the actual property. Lots and lots of upgrades, yet somehow it doesn’t look like a place with that much scratch sunk into it. Weird right? It looks very outdated and, well, like it was built in 1925.

And that explains why, despite these improvements, it’s still languishing on the market.

These sellers really screwed the pooch. They bought in August 2005 for $899,000, sunk God knows how much into a new roof, new copper plumbing (not cheap), a new (tiny, old-looking) kitchen, crown molding, etc…and now they’re trying to unload it for a 2003-equivalent price. If you assume they can actually sell it at this price and factor in improvement costs and commissions, the total loss on the property will be at least -$250,000. BRUTAL.

By the way, what are “Double Hung Windows with Low-E Insulated Glass”? I don’t see any updated windows whatsoever. I mean, check out the screen door! Somebody’s pulling a fast one.

The one silver lining is that the previous owner, who obviously left this place in shitty condition to necessitate such thorough updates and repairs, bought in 2001 for $393,000 and sold to these suckers for MORE THAN TWICE WHAT HE PAID JUST FOUR YEARS EARLIER!

Nice work, pal. I hope instead of buying an overpriced replacement you saw the ridiculousness of 22% annual appreciation, socked away your windfall into a 4.5% CD and rented a decent place overlooking the water. Man, I’d sleep like a drunken baby every night, dreaming of doing the backstroke on mountains of gold coins like motherfuckin’ Uncle Scrooge from Duck Tales.

I’ve thoroughly documented Long Beach’s steady decline from 2007 prices...

down to 2006 prices...

down to 2005 prices...

down to 2004 prices...

...and now it seems we are about to kiss ’04 goodbye as well. All in the matter of a year and a half! Next stop, 2003…and nobody knows the final destination of this freight train.

I mean, if this well-located (albeit kind of shabby-looking) place, spitting distance from the sand, can’t get action at what is quickly approaching a 2003 asking price (they’ve been asking $160k less than the 2005 price since FREAKING NOVEMBER and still no interest!), then what chance of success do LB sellers in less desirable areas that are still asking 2004-era asking prices have?

Answer: Very little.

Once the Great Housing Bubble has been fully deflated, those that chased the market down in an effort to deny the cold, hard truth that their decision to overpay for property during the housing frenzy was the financial equivalent of shitting the bed, will collectively kick themselves in the ass for not getting more serious about price reductions when the writing was on the wall and they could have still gotten out before financial ruination came knocking.

The sound of that collective ass kicking, my friends, will be deafening.


  1. Hey "El Bee" -- Love your blog. This post was hilarious. WTF is up with all of the Random Capitalization with that post?

    I live in Long Beach and love it. We have no plans on leaving/selling our place for a long (maybe ever).

    I have some questions for you, since you seem to be an LB real estate expert -- do you own a home/condo in Long Beach? Do you think Long Beach is an overall bad place to live or just still over-inflated for what it is? Do you think Long Beach has any potential for growth and prosperity again? If someone can get steal on a place (at <2003 prices) in Long Beach should they buy it or avoid Long Beach all together? Or avoid CA all together and move to another state that actually has a state budget?

  2. I am trying to find out what the $/SF was for the City College/Plaza/Los Altos was in the late 2001/early 2002 timeframe.

    Where can I find some estimates?

    I want to move into that area sometime in the next two years, and I am just waiting for the prices to come WAY down. $400+ on Mezzanine????

    Still Waiting..

  3. Let me clarify the "Still Waiting..."

    just waiting for prices to get to a reasonable level!!!!

  4. Anon #1,

    No no no...the whole point of this blog is that I am most assuredly NOT an expert. I'm just a young(ish) dude looking to buy a house I can be proud of without becoming a permanent debt slave or risking financial ruination. Less than a decade ago, this was a realistic goal.

    Although I'm not an expert, the one thing I am not is biased. I will call a good deal a good deal, and I will call an overpriced piece of shit an overpriced piece of shit.

    So, remember, I'm here to provide perspective and (hopefully) a few laughs--but I have access to the same information you do.

    For the record, as critical as I can be, I LOVE Long Beach. LOVE IT! My goal is to one day own a home in LB.

    I've been to every state in the U.S. (save five or six), and I can tell you there's no place I'd rather be than Southern California.

    So, despite our budget woes (and the increased tax burden we're about to experience--as if our current structure wasn't bad enough), I don't see myself leaving any time soon.

    My advice to anyone is: If you love it, and you can reasonably afford it--DO IT. I would not criticize anyone buying at '03 prices--knowing full well '02 and possibly '01 prices are around the corner--if they truly adore the place and consider a home what it truly is (i.e. an expense, rather than an "investment") and can see themselves living there long-term.

    As far as "growth and prosperity" goes, who knows? I love Baltimore, MD, but I don't think they will see G&P for a long, long time. But ultimately, if people love living there and can find gainful employment, who really cares, right?

    I appreciate your readership and I truly can't wait for the day when I can tell all of you that I finally bought a home I am in love with for a realistic, manageable price. Until then, documenting the greed and delusion still present in the LBC is my primary focus.

  5. Anon #2,

    I wish I had some great information for you, but I don't. I've found that skimming through Redfin and looking at past sales prices, then calculating price per sqft, is the best way to go.

    The Long Beach Press-Telegram is woefully deficient when it comes to real estate, and as of yet I haven't found a reliable source of information that spans far back enough.

    If you want a general estimate of where the next few years will take us as far as prices, I strongly suggest reading Dr. Housing Bubble's latest post, where he discusses the upcoming Option ARM disaster and how long that could take to play out.

    Also, don't underestimate the ability of the government to royally fuck up the much-needed return to affordable housing prices. If they truly do start offering 4.5% 30-year fixed mortgages, it will draw out the inevitable crash much, much longer than any of us can imagine.

    I think two years is a good, healthy goal for a home purchase. There are countless variables to consider (meaning you need to be ready to pounce on the right opportunity), but as you can see by my posts, we still have a looooooooong time before fundamentals are reached again in LB. Be patient, be smart, and be wary when the "buy now or be priced out forever" horseshit starts to rear its ugly head again when government programs and artificially low interest rates come into play (you could buy a place for $400k @ 4.5% now, but what do you think an 8.5% interest rate in a few years will do to that $400k "valuation" when you try to sell?)

  6. This looks like a great house and definitely a steal for the area.

    That's the one thing I always look for in older homes...updates, updates, updates! This one seems to have an updates bathroom some nice crown molding...this home will definitely be a winner for any anyone looking for a great home at a reasonable price.

  7. The Realtors are the ones that are suffering the most....Where is our bailout?