Sunday, February 15, 2009

Psst...Time to Wake Up, Sleepy Head

Well look who just woke up from their nap!

After 220 days on the market with absolutely no interest, this seller finally decided to downwardly adjust their ridiculous asking price of $325,000 to $215,000.

Address: 445 W 6th St #305, 90802
Asking Price: $215,000
Year Built: 1988
Size: 2 beds, 2 baths, 865 sq. ft.
$/Sq. Ft.: $249
HOA Fee: $235 (they didn't list it, I had to research it on my own--GREAT SALES TECHNIQUE!)
Purchase price: $78,000
Purchase date: 2/2002
MLS#: S539482
On Redfin: 221 days
Down Payment: $43,000
Monthly Payment: $1,300
Income Requirement: $61,000
Description: Super Clean condo, Very Well Maintained! 2 bedrooms & 2 bathrooms. Spacious living room with fireplace. Breakfast bar in the kitchen. Nice balcony with a great view of the city lights. Great community. Perfect for first time buyers! Submit all offers.

221 days and you only include one photo? And it's a fuzzy exterior shot taken from across the street? Dude, are you sure you're actually trying to sell this place?

Because your previous asking price of $325,000 sure didn't indicate a true desire to offload this property either.

Man, a $110,000 discount? That right there my friends is the very definition of capitulation. The question is: Will the price cut be enough to move this tiny apartment?

In a word, no.

Despite the fact that it is almost at rental parity and has reasonable income and down payment requirements, $215,000 isn't going to cut it. It's a matter of competition.

Check out these nearby 2 bed/2baths:

645 Chestnut - $185,000

535 Magnolia - $179,900

403 W 7th - $184,000

And last but not least, we have some friendly in-building competition:

445 W 6th - $180,000

This tidy little neighboring unit is undercutting Sleepy McOblivious here by 35 grand! Our seller, who I imagine is quite proud of himself for his ingenious plan to cut the price and "start a bidding war" is in for another disastrous 221 days unless he knocks off 40 Large TONIGHT.

The good news is that even if he ends up chasing the market down all the way to the bottom, he's not going to lose a dime (assuming he didn't refinance and HELOC the thing to death). He bought in 2002, before the bubble really got going in earnest, for $78,000. The total monthly nut is under $700! Dude, why are you even bothering to sell--especially in this ever-declining environment?

Actually, I'm starting to suspect he refinanced and HELOCed the thing to death.

Also, did you notice how many units are in this complex? 400! Good lord. Is that even possible?

Unless buying is substantially cheaper than renting, I can't think of one compelling reason to buy one of these apartments.

And after 200+ days on the market, it looks like nobody else can either.


  1. There seems to a certain amount of denial that continues to resonate in Long Beach.

    I was following 5634 E. Mezzanine (90808) which is a 2/2. It was offered at $585,000 ($425/sq.ft.). Today I check, and it is taking Backup Offers? Really???????? I wonder what the accepted offer was...

  2. "a certain amount of denial" is putting it lightly. People are still stuck in "well I paid X three years ago so that's what it's worth" mode.

    I don't get too excited about "Backup Offers Accepted" because so many of these never come to fruition. Let me know if it suddenly goes Active again...

  3. Found the reason for the denial.. Check out 3166 Marwick.

    SOLD 2/4/2009 $415,000

    The 2/1 "home" is 902 sq. ft. $460 per sq. ft.


  4. Knife-catching is not for the faint of heart.

  5. That kills me! 460/sq feet for an old-ass house! I mean it is 90808 but it's still Long Beach! This is where I would like to live but even making well above median income a responsible purchase would be 375K. That either buys an ok condo far away from the beach (no thanks to HOA fees) or a really crappy house in a crappy neighborhood. This does not make sense!

  6. LBisOverpriced,

    I feel your frustration. Unfortunately, government intervention will hardly do anything to address the mounting foreclosures or plummeting values, but what it WILL DO is prolong the crash for much, much longer.

    David Axelrod, Obama's senior adviser, straight up ADMITTED that the administration intends to keep housing unaffordable for responsible citizens:

    Obama's housing plan is focused on "...raising home values that have been plummeting."

    So, yeah, the government actively wants to make housing unaffordable for someone like me and wants to ensure people who never could and never will be able to afford their homes can stay put (for another six months until they inevitably default, that is). Perverse, but them's the breaks.

    Anyone hoping for a big, swift, nasty crash are in for a sad surprise. It should happen, but the gov will make sure it doesn't (and there ARE some compelling reasons why, as some commenters on this site have pointed out). I fear the bottom won't arrive until well into 2011 or even 2012. Just save your cash, live within your means, and think about how every month that this crash is dragged out, your future home just gets nicer and nicer.