Sunday, July 19, 2009

Guess What Time it is...

Address: 420 Winslow Ave, 90814
Asking Price: $799,900
Year Built: 1959
Size: 2 beds, 2 baths, 1,721 sq. ft.
$/Sq. Ft.: $465
MLS#: P693035
On Redfin: 23 days
Down Payment: $160,000
Monthly Payment: $4,800
Income Requirement: $230,000
Description: This rare, custom home epitomizes the architecture of the mid-century. A vaulted ceiling showcases a wall of glass overlooking the kidney shaped pool. Trendy home in one of the finest of neighborhoods. The fireplace hearth is curved and cantilevered. The master bedroom is large with sliding glass doors allowing an unobstructed view of the pool and outdoor living area. The guest bedroom is large with ample closet space. The absolutely adorable original guest bathroom with the darling yellow tile is accessible from the pool. The galley style kitchen has the original rich wood cabinets. There is also a den/office adjacent to the dining area. Nearly new central air conditioning, new pool pump, new garage door and new water heater.

A pretty damn good description! Nice work!

I dig this house. I really do. The vibe is great, the layout is kind of funky and esoteric, and the retro furniture (save these nasty-ass pink chairs below) provides a glimpse of just how sweet this place could be with a consistent design plan, the right artwork, and a metric ton of elbow grease.

Check out this sales history for a sordid tale of winners and losers in the treacherous game of musical chairs known as Southern California real estate:

Dec 29, 1989 - Sold $410,000
Nov 06, 1998 - Sold $362,500
(after nine years of ownership--mostly during the last housing downturn--the 1989 buyer took a $70,000 hit. But I thought real estate always went up?)
Mar 04, 2005 - Sold $755,000 (how's about doubling your money in eight years? Thank you housing bubble!)
Jul 13, 2006 - Sold $891,000 (a quick $80,000 profit for one year of ownership! Boo-ya!)
Jun 26, 2009 - Listed $799,900

The most amazing thing about all of those transactions dating back to the 80s is outside of a "nearly new" AC unit and pool pump, nobody actually put a dime into this house. No improvements, no upgrades, no real money into it. In fact, during the bubble, two owners racked up lottery-worthy financial gains by just living here and leaving it as-is! Amazing.

Our featured buyer, who paid almost a million dollars ($891,000) near the peak of the Great Housing Bubble, clearly bit off more than he could chew (and before some knucklehead starts whining that this "victim" lost his job and therefore should bear no responsibility for his losses, paying so much for a house that mortgage payments can't be sustained after a temporary job loss is the very definition of "biting off more than you can chew") and after three years of ownership has decided to sell--even though it means shouldering a significant loss.

And with an initial asking price $91,100 less than what he paid three short years ago, he clearly sees the writing on the wall and is not in any denial about the coming financial pain.

What kind of pain are we talking?

Assuming this underwater seller finds a sucker--ERRR...buyer for the current asking price of $799,900, the loss including commissions will be roughly $140,000. That's nearly $50,000 depreciation per year of ownership! Ouch.

Mind you, this is not a short sale (yet) so that will be a straight cash loss.

Of course, those loss calculations are assuming this seller, with this kitchen:

...and this bathroom:

...and, uh, this bathroom: able to secure a buyer for 800 Large.

If the seller truly believes that's going to happen in this economic (and lending) environment, it's obvious what time it is at their house:

Straight up, this is a borderline fixer. That kitchen is a demolition permit with a fridge (ugh, sweet linoleum), I've seen nicer carpeting in downtown Vegas, the bathrooms are terrible (although to his credit, he's made the most out of them), and there must be an awfully (emphasis on awful) good reason for excluding shots of the bedrooms.

Sorry, holmes. Unless you find a chump with better weed than the stuff you're smoking (good luck), it's not going to happen.

This is a killer neighborhood and the home has a ton of potential given the architecture and the pool, but there's just too much three-bedroom competition in this neighborhood.

Do you think he'll get serious in time to catch whatever's left of the Super Summer Selling Season(tm)?


  1. Welcome back from whatever affordable housing city (cities) you were visiting last week!!!

    Did you forget you are writing about Long Beach? I think you need to spend some time back in So Cal!!! :) How was the trip?

    No, this seller will not get serious. I have a suspicion that this will sell close to the asking price.

  2. The trip was good! Incredibly busy (as evidenced by the lack of posts), but good. I was in Baltimore and DC.

    You would think Baltimore, for all the problems it has as a city, would be more affordable. That is most certainly not the case. Worse, they had a veritable explosion of condo development near the inner harbor, and most of those overpriced hat boxes just sit, waiting for the "immaculate recovery."

  3. 2 bedrooms for 800 K- not so fast they will be lucky to get 600. Hopefully they did not get HELOCed in the process, otherwise it will be a most painful run to foreclosure indeed.

  4. El Bee,

    Well at least we all know that there isn't a need for an immaculate recovery in Long Beach!!!!