3600 E 4th St #202, 90814
Price: $282,596
Beds: 2
Baths: 2
Sq. Ft.: 1,320
$/Sq. Ft.: $214
Lot Size: 892 Sq. Ft.
HOA: $259
Year Built: 1985
Purchase Price: $440,413 (this is the bank taking it back--and taking it in the shorts assuming it sells at this price!)
Purchase Date: 5/2009
MLS#: P696443
On Redfin: 3 days
Down Payment: $57,000
Monthly Payment: $1,800
Income Requirement: $81,000
Description: Bank Owned. Prime Belmont Heights Location. This is a large, 1320 sq ft, 2 bed/2 bath remodeled unit with w/d hook-ups in unit. Perfectly located to shopping, dinning and the beach.
"Dinning"?
This REO will likely be gone by the time I post it, but it's worth highlighting because, well, I think it's a good buy at this price. If this was a somewhat stable market and I wasn't convinced this thing would get bid up to well over $300,000, I'd put an offer in TONIGHT.
First, this place is enormous. 1,300+ square feet is palatial compared to most Long Beach apartments.
Second, the building was constructed in the mid-80s--not an easy find in LB where houses from the 20s and apartment buildings from the 50s and 60s are commonplace.
Third, at $214 per square foot, the bank is asking a 2002-equivalent price--making this the cheapest condo in the area by a long shot.
Fourth, this pad, although not that impressive, sure looks a helluva lot nicer than most apartments I've peeped recently.
Fifth, the PITI would likely be within a few hundred bucks of the rental rate, meaning when you factor in the tax benefit it might actually be slightly cheaper to own than rent!
Sixth, this is a desirable neighborhood (location, as it relates to 4th Street and the gas station across the street, not so much, but the area is good and will retain value).
Question: Is this a one-time REO fluke that "doesn't count," or is this a glimpse into the future of Long Beach real estate, where spacious, top-floor, mildly-upgraded condos sell for the low-200s per square foot?
I think you're right about it getting bid up--it looks like a classic bank effort to get a million offers and push up the listing price. Multiple offers also puts them in a position to refuse escrow concessions like fixing damage, cleaning, and funding a home warranty plan (to name a few). But even in that case, it's bad news for the $400K+ crowd (and the appliances even come with this unit!).
ReplyDeleteBut on the note of multiple offers, I still don't understand where this demand is coming from. Are there really that many DINKs and well-off singles looking to buy in Long Beach? While 1300 square feet would make raising a family in this place less hellish than in other available properties--it doesn't solve the bedroom problem. It seems to me that there's an oversupply of two-bedroom properties relative to the population of families that can reasonably expect to be served by two bedrooms for a while. And yet people are still overpaying for slightly desirable two-beds... it doesn't make any sense to me.
I have seen the future and it is a unique shade of rational.
ReplyDeleteYikesboy
Can it be? The beginning of the slide into the "abyss"... or a we like to call it.. Realistic Home Prices....
ReplyDeleteI won't be holding my breath.
My Answer to Your Question: This is the future of Long Beach Real Estate.
ReplyDeleteHere comes the sun..... here comes the sun....
ReplyDeleteand I say, IT'S ALRIGHT! (cue music)
"is this a glimpse into the future of Long Beach real estate, where spacious, top-floor, mildly-upgraded condos sell for the low-200s per square foot?"
ReplyDeleteIt could be, or it could be a stop-over on the way to normalized condo pricing in LB. I'd guess that you won't see prices drop to much less than mid-to-high $100s per foot (decent areas).
Historically, condos were the entry-level purchase of choice for better neighborhoods. Nicer than surrounding apartments, and around 1/2 to 2/3 the cost of nearby homes. I know many former DINKs and high-income singles that bought condos as their first home. The old condo strategy was to pay down the mortgage, get modest appreciation, and build your equity nest-egg to trade into a single-family house when you were ready for a family. High-income singles would often rent out extra bedrooms to ease the mortgage or accelerate the amortization (I know several guys that did this - general experience was that it was a pain in the ass unless you got lucky with the roommate).
I don't know of anyone who tried to raise a family in a condo (they're fairly sterile and anonymous), but with moms working longer and having kids later, and LB's decent amount of non-nuclear families (gays, lesbians, divorcees, etc.), condos continue to serve a sizable niche.
Jen,
ReplyDelete"Multiple offers also puts them in a position to refuse escrow concessions like fixing damage, cleaning, and funding a home warranty plan (to name a few)."
I never really thought about that. Very interesting.
Oldtimer,
ReplyDeleteGreat point about the non-nuclear families.
I agree that LB condos serve a good-sized niche. Maybe because the detached housing stock in Long Beach is so small/old, many don't look at condos as a "step down" from houses? Just a guess.
My concern is the sheer number of condo conversions completed during the bubble. I'm sure plenty will convert to rentals, but it does seem like there is a lot of condo stock out there.
el bee, I think you are correct that a large percentage of recent conversions will revert to rentals (not just in LB but thru-out SoCal). Many of the recent conversions were halfassed attempts to gussy up ordinary apartment buildings (hardwood floors, new kitchens, crown molding, fresh paint and not a whole lot else). In addition, a large percentage of condos are already rentals (this has been true for decades).
ReplyDeleteSuburban condos/apartments in east LB (like this one) have been well occupied for the last 10-12 years, and I expect they'll be well occupied again after a couple of years of adjustment.
What I can't figure out is the downtown LB condos. That area was poorly occupied prior to the speculative boom, and I don't know what sort of tenants the recent developers were going after. Maybe it worked as a value play if east LB condos were going for $400K +. But if east LB condos are going for $200K, I'd guess a lot of the downtown condo developments are economic disasters, either for the developer or the buyer, depending on how far along they are.