Thursday, July 23, 2009

Foolhardy Financing, Foreclosure, FAIL

1317 Ximeno Ave, CA 90804
Asking Price: $462,000
Beds: 3
Baths: 2
Sq. Ft.: 2,017
$/Sq. Ft.: $229
Year Built: 1955
Purchase price: $698,000
Purchase date: 5/2005
MLS#: P650732
Down Payment: $92,400
Monthly Payment: $2,600
Income Requirement: $132,000
Days on Market: 349 days
Description: One of the nicest home in the neighborhood. Must see interior to appreciate. Conveniently located close to schools, shops, restaurants and freeways. Gourmet kitchen with granite counters, center island and newer appliances. Entire home is wired for Audio, TV and computer network with Cat 5. Audio system in Living room, kitchen, master suite and outside by family room in private yard. Private yard with fountain near the front of home. Walking distant to Wilson High School. Short Sale. All terms are subject to lender's approval. All information deemed reliable but buyers should verify all information. Please see agent's remarks for showing instructions.

Dang, a 2,000 square footer with tons of upgrade goodies for only $229 per square? Why so long on the market?

Answer: Sweet house, shitty location.

As discussed previously, when realtors exhort the importance of "Location, Location, Location" they're not being needlessly repetitive--in my opinion there are in fact three different "Locations" when it comes to buying property:

Location #1 - Neighborhood.

Location #2 - Positioning within the neighborhood (waterfront, cul-de-sac, interior location).

Location #3 - Proximity to external infrastructure elements (under a flight path or power lines, behind train tracks, a freeway, or NHRA drag strip).

Sadly, this seller failed on all three counts.

Location #1 - For what he paid, this is not a good neighborhood. One drive down this street and you'll quickly see what I mean. He committed the cardinal sin of real estate investing by overpaying for "one of the nicest home [SIC] in the neighborhood."

Location #2 - It's barely "within" the neighborhood--it offers no interior protection and is directly on top of a busy, fast-moving street. Gooooooooooooooooooooooood luck backing out of your driveway each morning.

Location #3 - It's right behind a Subway and some other dingy stores and across the street from a mechanic (to be fair, Tommy's is right around the corner. Effin' delicious).

Peep the overhead map and you'll quickly see why for 349 days this seller has been mewling, begging, pleading for a buyer despite a seemingly attractive price.

Assuming the current asking price of $462,000 has a remote chance of being accepted by the lender, the loss on this property will be -$263,000 including commissions. Man, after just four years of ownership.

Remeber that scene in The Bourne Identity when in the middle of a fight in a home office, Jason Bourne uses a ball-point pen as an improvised weapon and jams it into the assassin's fist?

Yeah. That's probably how -$263,000 feels.

Again, that's assuming the bank gets off its ass and approves the short sale at that price before the (already initiated) foreclosure process is complete.

But we all know that won't happen and the bank will end up taking this thing back at auction. And after more delays, stall tactics, and assorted dumbfuckery, it will eventually make its REO debut on the market for a much lower price. In a much worse market.

And it will STILL be in the same sub-par neighborhood, right on a busy street, surrounded by a mad plethora loud, dirty businesses.

I have a theory that some houses can ONLY sell in a bubble. But in a normal, or (especially a) declining market, these same properties possess little chance of selling for anything but a deeply discounted price (especially one like this that is highly unlikely to find another fool dumb enough to buy "one of the nicest home" in this 'hood. By the way, bragging about having the nicest house in this neighborhood is kind of like saying, "My grandpa had the biggest load in his diaper out of the WHOLE nursing home!" Really nothing to be proud of).

This "Three Ls of Real Estate" flunkard probably already mailed that key-filled envelope back to the bank, but don't count on the lender rushing to complete the foreclosure process and take these massive losses onto its books. It could be another year before it gets its shit together and finally unloads it--for a much, much lower price.


  1. Just wanted to let you know how much I enjoy your blog.

    The area you cover is where I was born 50 years ago.

    It's fun to read your take on things.

    Good job!

  2. Thanks anon. I appreciate the kind words.

  3. That is one very nice home, but I am not sure I'd even consider paying 250K knowing that the Long Beach Gran Prix runs through your hood at 8 A.M. and 5 P.M. M-F respectively. I am sure that the Subway and Little Caesars attract an intersting element throughout the evening, not to mention the very drunk Long Beach State snowflakes that need their 1 A.M. grease fix at Tommy's. Owning this home would be like driving a nice Ferrari through a pot hole infested street in TJ and never wanting to leave the car unattended. Damn Shame. On a different note, I am still seeing Seal Beach homes at 600.00/sq ft. Complete and utter madness I tell you!! Are they getting some mineral rites that we are not aware of? Are people coming up with 70-140K in down payments for these 1950s tract homes? WTF???

  4. ANON,

    Ditto on Seal Beach. We've been watching and waiting. Unbelieveable. Not sure if prople are pulling homes from hte market or what but it seems that the listings have dropped.

  5. Anon, SR,

    There are a TON of long-term Seal Beach owners and I bet even more current listings will disappear the second the Super Summer Selling Season is perceived to be over. Those people are in no hurry to sell and were likely just "testing the waters"--and those are pretty much the only sellers.

    That means low inventory for the forseeable future unless unemployment suddenly goes through the roof.

    Unfortunately, I think Seal will remain sticky for a long, long time.

  6. "Easy access to a 6 hour round" --- come on, realtard.. put it in there.. Easy $100K bump in price.

  7. el bee, I think you're being too nice on the location of this property. Ximeno is the main route between Belmont Shore/Heights/Naples and the northbound 405. Traffic count has got to be in the several thousands per day.

    And southbound Ximeno goes from 2 lanes to 1 at your front door (right lane goes west on Anaheim). I've seen lots of accidents/incidents at that spot over the years.

  8. "Dumbfuckery" - Classic. Love the blog!

  9. Nice posting LB. I really enjoy your sense of humor and you are one of the few that seem to get it. I know a lot of people who still don't seem to understand the risks of buying in this environment.

  10. El Bee, this is right down the block from where I live. I pass by this house all the time, walking to Ballys Total Fitness....

    Like another blogger said, it definitely IS great to hear your take, and I thank you so much for your blog. I'm getting a real good education here, and I can't tell you how much I appreciate it.

    Ok, now I'd like to ask a couple questions.

    #1 Does this property have no yard, other than the front? I tried looking the other day, but couldn't really tell. Now looking at the ariel and birdseye view, it looks like a definite no. I'm thinking that has got to be a big negative on the price right?

    #2 This is a general question, but on listings I see the "lot size" square footage, as well as the square footage of the home itself. In this case, the lot is over 5 thousand square feet, while the home is only 2 thousand. WHERE IS THE OTHER 3 THOUSAND SQUARE FEET?????

    It doesn't look like there is any backyard, and the front yard is a decent size for Long Beach standards, but certainly nothing close to 3 thousand square feet.

  11. Oh yeah, and wow you made a good point about backing out of the driveway!!!

    I never really thought about that.. I mean as I pass by this place all the time, and see the "for sale" sign, I contemplate owning this home. I must say that the front is VERY pretty, and the gate and walls are pretty darn nice. You get the feeling you can kinda escape all the ugliness of the surroundings, into your private castle. And then you think "yeah, I've got a driveway and garage, so I can drive in like the Bat Cave, and escape the rest of the world".

    Well I NEVER considered how difficult it'd be, to every single day have to negotiate pulling out onto that HECTIC part of Ximeno! (imagine being in a rush, and needing to leave in the middle of the day!)

    So excellent point there!!

    One other thing I don't think anyone is aware of, is living there right behind Subway, your house would probably be inundated with the smell of their cookies.

    Could be a good or bad thing, depending on your preference, but when I walk by there is a STRONG sweet smell from their cookie mix (ALWAYS).

  12. Oldtimer,

    You're right--the post doesn't really convey just how incredibly awful this curbside location is. That street is absolutely INUNDATED with Traffic Circle outflow. If anyone drives down that street (especially, as you pointed out, where it goes into one lane) you'd realize just how insane this asking price is.

  13. MikeinLBC,

    It turns out the garage is in the back, so technically you wouldn't be backing out into Ximeno, but still--where are your friends and family going to park for your housewarming party? And with all those business taking up street parking, where is the FedEx guy gonna sling his truck? I mean, just think of the clusterfuck potential living right on top of an extremely busy thoroughfare like this.

    A while back I was interested in buying a house on (and I mean ON) Temple. Just to get a gauge of the traffic situation, I stood out front for about 10 minutes watching cars. It turns out the stop signs and traffic signals were too far down the street, meaning it would be very difficult to back out because there were barely any breaks in traffic on a very busy section of Temple. Further, the driveway was too narrow to turn the car around to go head-first into the street. Deal killer.

    I’m not sure about the yard situation. It appears to have a decent sized front patio but that’s about it. It’s a good question—where did the other 3,000 square feet go?! That front lawn is useless—that is, unless you want your kids to play on their Slip n’ Slide five feet from traffic.

  14. Well half of the front yard is behind the gates, but it's nothing big enough to really enjoy hanging out on.....

    But yeah, I constantly see house listings with lot size square footage that far exceeds the home size square footage. Often times there is absolutely no indication where the extra lot footage is.

    I mean if you had an excess of 3 THOUSAND square feet, you'd think you'd wanna take a picture of that extra space no?!

    I haven't yet been able to figure this out, and this listing is another perfect example of mysteriously missing extra lot footage, nowhere to be found.

    As for a poor person like myself, I'd absolutely RELISH the chance to buy this at 300K though. Heck I might even make a stab at 350K, but then of course, I would defer to your blog, and see what else is available in the same price range first.

    Still, this place seems to have a lot of square footage, and a good amount of privacy, and even though it's ON Ximeno, it's still a decent space off the street, to where once you're behind the front gate, you can probably escape the noise.

    Olaj would probably love this place.

    JUST KIDDING OLAJ!!!!! hahaha

    Hey it's Friday, had to josh ya a little my friend!

    Have a blessed Friday everyone!