Signs of Hope?

I've featured units in this building before, and today I have one of particular interest for those patiently waiting for the inevitable return to sanity in real estate prices:

Address: 420 Redondo Ave #207, 90814
Asking Price: $150,000
Year Built: 1970
Size: 1 beds, 1 baths, 883 sq. ft.
$/Sq. Ft.: $170
HOA Fee: $242.32
Purchase price: $307,000
Purchase date: 8/2006
MLS#: S576939
On Redfin: 3 days
Down Payment: $30,000
Monthly Payment: $1,000 (@6%, because, well, it's inevitable at this point)
Income Requirement: $43,000
Description: Ideal and Clean 1 bedroom for a one party occupant, newlyweds or investors! Well maintained Belmont Heights building. A few blocks from the beach. Balcony with morning sun. An easy walk to Belmont heights restaurants, night life, shopping and attractions. Association pays water and trash. All electric, clean living.

"All electric, clean living"? What the eff does that mean?

I imagine that's how an robot, fresh out of rehab, describes its menial, 12-step existence.

SOBER ROBOT-/-MISSES TASTE-/-OF SWEET, SWEET BOOZE.

BUT-/-SOBER ROBOT-/-LOOKING FORWARD TO NEW LIFE OF ALL ELECTRIC, CLEAN LIVING.

SOBER ROBOT-/-MICROCHIPS SWEATING-/-THINKS ONE BEER CAN'T HURT.

SOBER ROBOT-/-NOW BUZZED ROBOT-/-HAVING HARD TIME-/-COMPUTING HOW ONE HEINEKEN-/-CAN TASTE-/-SO DELICIOUS.
BUZZED ROBOT-/-ON BEER #9.344-/-LOSING CONTROL.

DANGER!

DANGER!

M4LFU..NC/T1O:N!1!

KILL! KILL! KILL!

Uh.

Sorry.

As you can see, this place is pretty much all orginal:

One custom touch that caught my eye was the handicap handles in the bathroom (well, those and the sexy pink tiles):


I guess an elderly person lived here? There doesn't appear to be a shower, so add that to the list of improvements you'll need to make right from jump street.

Anyhow, here's the deal: Priced at $150,000, this Belmont Heights condo is slightly cheaper to buy than to rent. Yep.

There it is.

This is pretty encouraging and even the perma-bears have to perk up and take notice. At first I thought the $150,000 price tag was a typo and it was supposed to be $250,000. But, a neighbor a few doors down sold two months ago for 190k:

420 Redondo Ave Unit 212
Sold on Apr 08, 2009 - $190,000
0 miles 1 bd / 1 ba 884 Sq. Ft.

So $150,000 is a realistic price for an REO (Real Estate Owned) unit, which tend to significantly undercut nearby sellers. And considering the ragged condition of this unit, the 20% discount seems about right.

At this price, the bank clearly wants this property off its books--comps be damned. I think it will get bid up somewhat from this price, but considering it has surpassed rental parity and is easily affordable on the local median income, I imagine this condo will go quickly.

Here's some background:

In August 2006, the former owner inexplicably decided to buy this outdated one-bedroom for an eye-bulging $307,000.

Um.

Wow.

It appears that the property went back to the bank in April 2009 for $232,405. If this place sells for the current asking price of $150,000, the loss to the bank will be -$91,000 (including $9,000 in commissions).

The former owner is likely out around -$75,000, based on two years of mortgage payments and any down payment. And they say renting is throwing away money!

Anyhow, assuming the bank is serious about this price, it represents a significant turning point in Long Beach real estate and spells utter disaster for nearby sellers.