Tuesday, July 7, 2009

The Bubble is Back!

Thanks to the always eagle-eyed Katy in LBC for sending this one in.

Address: 384 Santiago Ave, 90814
Asking Price: $2,000,000
Year Built: 1986
Size: 5 beds, 6 baths, 4,436 sq. ft.
$/Sq. Ft.: $451
Purchase price: $974,687
Purchase date: 3/2009
MLS#: P693962
On Redfin: 4 days
Down Payment: $400,000
Monthly Payment: $12,000
Income Requirement: $571,000
Description: Spectacular custom pool home well located in prestigious Alamitos Heights. Two master bedrooms, one on entry level and the other upstairs. Spacious rooms with abundant closets. Quality construction with extra wide foundations, R-30 insulation throughout including interior walls, two waterfalls for black bottom pool and spa, backyard pool house with shower and toilet (6th bathroom), solar electric feedback (BP), solar pool heating, inside pool computer to regulate pool and spa, wide hall downstairs and ramp from garage for wheelchair access, roof 5 years old, new Air Conditioning, huge stairwell skylight, and many other amenities including multiple fireplaces, huge bonus room, dramatic foyer, large breakfast room, and step-down conversation area with fireplace adjacent to living room and formal dining room. The upstairs master suite also has a step-down seating area with its own charming fireplace. There are inviting balconeys front and rear. This is a home to treasure and enjoy.

Ah, they were so close! And then it all fell apart with "balconeys." I still keep reading it as "baloneys." Mmmm...baloney...

Speaking of "treasure," for $2 million there better be some motherfuckin' gold dubloons buried in the backyard.

Wait, what?

There's no back yard to speak of?




And thanks for the quality pictures of all the bullshit "amenities" you so lovingly described. You're a marketing genius!

And the one picture you provide is of...a tree?

I think there's a house in the background of that photo but it sure as shit isn't a $2 million property. Nice rotting garage door and wood shingles (ugh, sick).

You are trying to actually sell this thing, aren't you?

Anyhow, the previous owner purchased in October 2004, just as the bubble really got cranking, for $1,100,000. $248 per square foot for a custom home shaped like a pool (that's what they meant by "custom pool home," right?) in this neighborhood actually sounds like a decent deal for 2004.

Anyhow, the loanowner (admirably) made it five years before that crushing $7,000+ monthly payment overwhelmed him.

A job loss is the most likely explanation, as he wasn't really that underwater. I say that because the bank took it back at auction in March for $974,687--which pretty much makes it the market price. Plus, the nearby listings are asking way more than a million bucks (nearby sales are a different story--according to Redfin there have been ZERO recent sales).

Was it an exploding Option ARM?

Hmm. Even with 0% down, the most ridiculous teaser rate, and making the bare minimum payment, five years of writing checks still would have managed to pay down several hundred thousand dollars--not just the paltry $125,000 difference between purchase price and debt outstanding.

So what happened here?

Mortgage Equity Withdrawal?

A second mortgage that was completely wiped out?

Who the hell knows.

The real point of this post is that the bank, after discovering the true market value of this home at auction (after all, nobody else bid on this house--otherwise the bank would have gladly let them have it for what was owed, right?), somehow determined this house more than doubled in value during the last three months.


Just how stupid does this bank think buyers are?

Answer: Incredibly.


  1. That one seems like a bargain compared to this one: http://www.redfin.com/CA/Long-Beach/850-E-Ocean-Blvd-90802/unit-1401/home/7611802

    Over a million dollars for a two-bed CONDO in the 90802.

    You'd think the agent could have bothered with moving some of the crap out of the way to take the photos. I particularly love the one of the kitchen--look, you can do your laundry while you microwave a tv dinner!

    HELLOOOO? You can rent an ocean view 2 bed condo in this zip for under $2K now!

  2. Yeah, people are either incredibly greedy or incredibly stoopid.
    Ummmm....maybe both?

  3. $2M? Really? I understand the area is nice, but $2M nice??? Because you can walk to the lagoon or the park???? That salt water smell is really expensive!!!!!!!

    I have an update from 90808. 3259 Marwick was offered at $529K, and sold for $539K.


  4. Thanks for the shout out el bee.
    That sure is a nice tree! It's crapola like this that's gonna keep us out of the market for quite some time...
    Oh and Jen...yeah that condo is just ridiculous.
    I am having a very hard time understanding how this market remains so rigid given what's going on in the economy! WHEN WILL WE SEE HOME VALUES REFLECT ACTUAL INCOME? How long can fraudulent bankers, greedtarded home owners and WTF real estate agents continue to keep these prices artificially high?