Wednesday, April 1, 2009

Back From the East Coast with a Quickie: UPDATE IV

Mar 25, 2009 - Price Changed $359,900
Feb 05, 2009 - Price Changed $374,900
Jan 07, 2009 - Price Changed $395,000
Jan 01, 2009 - Price Changed $425,000
Nov 17, 2008 - Price Changed $553,000
Jun 20, 2008 - Listed $549,000

It's been 284 days! Put a bullet in this short sale's brain and put it out of its misery already!

Here is a compendium of this property's long, arduous, market-chasing journey: THE SAGA OF SUCK.

Look, I give the agent credit for slashing the price on cue each month for the last few months, but it's clearly not getting the job done. The weird thing is the current asking price is undercutting nearby sellers by a decent amount and $275 per square foot is almost, sort of, kind of approaching what's the problem? Why no interest?

Honestly, I think it's the sleeping platform.

First, as an investor, you are severely limiting your renter pool with that disco deck. No kids, no older folks--just young, single, wealthy men (you can call me out in the comments, but I don't think the loft-promoting movie Big had quite the same influence on young girls as it did boys--this type of property primarily appeals to dudes).

Second, as an owner occupier you not only have the same problems but, come on, that bedroom barge would be fun for about 3.6 days before you longed for a few walls to hang pictures on and a door to shut every once and a while. Even if you live by yourself, you're telling me being out in the open like that wouldn't get old?

Maybe it's just me.

All I know is last night two smart, economically-educated friends, whose opinions I respect and value, ganged up on me and told me I was dead wrong about house prices continuing to fall in Long Beach--specifically Belmont Shore. They both said that sales are picking up and "prices aren't going to get any lower."

When I countered, "That's what they said six months ago, and a year ago, and 18 months did that work out for those buyers?" my opinions were promptly dismissed as the biases of a doom and gloomer.

Is it just me, or are people becoming more optimistic lately? But unless I'm missing something, it's wholly unjustified. I get the weird feeling that a lot of folks are "willing" the economy to improve simply because they feel like now is the time.

When I asked them to provide just one positive economic indicator that prices won't continue to fall, I got nothing. What I did get was a "feeling" that this is the bottom and that things can't get any worse.

I know plenty of Long Beach Housing Blog readers who would strongly disagree with that sentiment, but I'm curious to hear from those who are a bit more bullish, or at least have reasons for becoming more optimistic. Any thoughts?

Is it time for me to officially change into my Bull hat?


  1. I'm curious how you feel about the lower inventory and multi offers on the lower priced properties in the Belmont Shores area? How can prices continue to fall when the demand is rising?

  2. It's spring, talk to these optimists next year (and it will be a depressing one), let's see who is correct in their prediction. I believe THEY will buying YOU a beer (or beers). Give this mess some time to unwind. This is just the first wave, prices will continue to drop.

  3. I believe prices will continue to fall, but for realtors (who are far more concerned with volume than prices), this past month may just represent the turn-around. Prices have fallen to where they are completely obscene on current incomes. Prices still have high unemployment and uncertainty to contend with, will have to deal with competition from higher quality competition as the swarm of 5-year interest only and other alt-a loans from '04 and on start to reset and default this year, and still have a little more to fall to reach nominal pricing based on current wages, BUT being that people can qualify for proper mortgages now, properties are moving. It might be months or years before all the current downward pressures are relieved but affordability is going to provide a cushion against the all-out crashing we've seen for the last couple of years. Anomalies like this pad will linger until inflation pulls wages up to where the high price makes sense.

  4. "I'm curious how you feel about the lower inventory and multi offers on the lower priced properties in the Belmont Shores area?"

    You just answered your own question: "lower priced properties".

    "How can prices continue to fall when the demand is rising?"

    Back to your own answer. Demand is rising for lower priced properties. So, dear student of higher economics; over priced real estate has to become lower priced to meet with the previously mentioned demand. Got it?

    L_Thek_Onomics :0)