It's a Wonderfyl Life

3833 East 2ND St #301, 90803
Price: $594,500
Beds: 2
Baths: 1.75
Sq. Ft.: 1,489
$/Sq. Ft.: $399
Year Built: 1986
MLS#: P704353
On Redfin: 37 days
HOA: $291
Down Payment: $119,000
Income Requirement: $170,000
Monthly Nut: $3,500
Description: This Plaza Mira Mar penthouse is stunning. This top floor corner unit with ocean and city view condo is just steps to the Ocean, Pier and the wonderful Shops and Dining in Belmont Shore. Marble floors through out with newer carpet in both bedrooms. Newer kitchen with cherry wood cabinets, granite counter tops with built-ins, including a lazy Susan. Gas fireplace in the living room with a marble manttle and hearth. Custom see through shades in living and dining rooms, plus custom drapes. New double paned windows and doors. Forced air heat and central air conditioning. Both bathrooms are highly upgraded, master bath has a seperate shower and a jacuzzi tub. Recessed lighting and skylights. Inside laundry, washer and dryer are included. There is a large balcony for you to enjoy your wonderful views. 2 parking spaces are also included. There is no need to preview this wonderfyl home.

"Through out"

"Manttle"?

"Seperate"?

"Wonderfyl"? WTF? You just spelled "wonderful" correctly TWO SENTENCES AGO!

Come on, lady! Have a little pride in your work. For a $600,000 listing (and the commission you're demanding "for all of your hard work") you should really be providing better service to your client.

Every time I roll by this building, I'm impressed with the exterior. Most Long Beach buildings this old very much look their age, but this one is quite nice with vinyl windows and doors, a decent paint job, and updated balconies and railings. For a building built in 1986, it's commendable.

The interior isn't too bad, either. For instance, the bathroom looks really nice:

As does the kitchen (that's an impressive collection of refrigerator magnets!):
But I have to say, the tile floors are killing me.
Yikes. I want a living room, not a mausoleum. Those would have to go STAT.

And for an apartment sporting 1,500 square feet, this master bedroom seems awfully cramped:

Come to think of it, so do the hallways:

Whatever, I'm picking nits--overall this apartment is pretty sweet. And with the right furniture and wood flooring, it would be amazing.

Anyhow, the pricing history tells an interesting tale:

Oct 05, 2009 - Price Changed $594,500
Sep 23, 2009 - Listed $619,900
Apr 27, 2005 - Sold $660,000 (+15.8%/yr)
Apr 05, 2004 - Sold $565,000 (+50.4%/yr)
May 09, 2003 - Sold $390,000

Our featured seller purchased this apartment in 2005 for $660,000 , just two years after it was appraised and sold for a mere $390,000.

That's a 70% increase in "value" in just 25 months. No red flags went up? Really?

Anyhow, after adorning the 2004 buyer with $105,000 in pure, unfettered bubble cash, our featured seller settled in to enjoy his wonderful new apartment for years and years.

And by "years and years" I mean four.

Because this September he put it on the market for $619,900--a grim acknowledgment that by this time the party was long over and a loss would incur.

And that grim acknowledgment quickly morphed into abject horror as the market continued to drop like a porpoise thrown off the Empire State building. Consequently, the seller cautiously reduced the price by $25,400, hoping to attract a buyer.

**crickets**

And assuming a cash-flush savior shows up tomorrow and agrees to pay full asking, the loss including commissions will be approximately $106,000. But I have a feeling Real Estate Jesus will be turned off by the $3,500 monthly payment considering his carpenter's salary.

Not to mention the fact that nothing in this (awesome) neighborhood has sold for anywhere close to $594,500 during the last six months:

$447,500 110 Termino Ave Unit 201 Sold on Jun 26, 2009
0.13 miles 2 bd / 2 ba 1,408 Sq. Ft.

$440,413 3600 E 4th St Unit 202 Sold on May 14, 2009
0.62 miles 2 bd / 2 ba 1,320 Sq. Ft.

$530,000 2999 E Ocean Blvd Unit 840 Sold on Jun 26, 2009
0.63 miles 2 bd / 2 ba 1,510 Sq. Ft.

$569,000 2999 E Ocean Blvd Unit 1820 Sold on Sep 04, 2009
0.63 miles 2 bd / 2 ba 1,510 Sq. Ft.

$385,000 2538 E 2nd St Unit 107 Sold on Jul 09, 2009
0.84 miles 2 bd / 2 ba 1,347 Sq. Ft.

$400,000 2538 E 2nd St Unit 307 Sold on Jun 10, 2009
0.84 miles 2 bd / 2 ba 1,347 Sq. Ft.

$380,000 2131 E 1st St Unit 304 Sold on May 19, 2009
1.05 miles 2 bd / 2 ba 1,451 Sq. Ft.

Keep in mind, the ONLY nearby comps to sell for more than $500,000 were in the Towering Inferno at 2999 Ocean--which as we all know is an OCEAN-FRONT building.

Here's the view from 2999 Ocean:

And here's our seller's "view":

Sorry holmes, those aren't even close to comparable.

And don't try to tell me a premium is justified because of the "penthouse" location. Saying, "I live in the penthouse" sounds really impressive until you discover this building only has three freaking floors.

So how does he justify asking this kind of money?

Easy: Because he's trying to minimize losses. So he tools around with little 3% cuts in the hopes that some sucker with severe brain damage (caused, incidentally, by a porpoise flung from the Empire State building) strolls along and makes his dreams of getting out with some semblance of a financial future come true. The market may prove me wrong, but I think this place is way overpriced.

I have a feeling he can't afford to cut the price any further, meaning an attempted short sale can't be far away.

Wrong Side of the Tracks

I started writing this post before the price was dropped $40,000, so while my assessment of the pricing has changed, my overall analysis has not.

743 EUCLID Ave #3, 90804
Price: $299,000
Beds: 2
Baths: 2
Sq. Ft.: 1,156
$/Sq. Ft.: $259
Year Built: 1981
MLS#: P702387
On Redfin: 48 days
HOA: $189
Down Payment: $59,800
Income Requirement: $85,000
Monthly Nut: $1,800
Description: Beautiful unit in quiet tranquil complex. Features bamboo floors, granite counters, fresh paint, recessed lighting, upgraded kitchen and baths, large master bedroom with walk in closet, dinning area that opens to kitchen, separate bar area with wine cooler and lots of windows for the ocean breezes.

"Dinning"?

And dude, "ocean breezes"? You're more than a mile from the water--you sure about that?

I have to give credit where credit is due and say that overall this apartment is pretty nice inside. I'm particularly fond of the dark-colored floors, the recessed lighting (although it appears to be quite far from the wall), and the overall vibe.

Hey, those Ginsu knives come with the place?

And is that bookshelf, reappropriated as some kind of candle holder with a whole lot of negative space, really such a good idea when the bathroom already looks kind of cramped? Try a shelf, yo.

Wait. Is it just me or is the toilet paper a bit of a reach from the ol' Oval Office?

This photo is the best:

1) I can see you in the mirror's reflection and you look goofy as hell trying to prop up your picture-taking arm like that, 2) You sippin' on the sizzurp or what? 3) Install a medicine cabinet, guy! Guests don't even have to search for your Viagra with this set up.

Want to be a realtor for a day? Here's what you do: While sitting in your leased Lexus ES300, close your eyes and rub them really hard with the palms of your hands. Take two big pulls of tequila from your glovebox flask--no, the glovebox, not your center console flask--run into a nearby house and start snapping photos with your big toe:


Good job, sparky! Your license is in the mail!

I guess I can see why those photos are blurry--they didn't even bother to tidy up those rooms. And I'm confused...which room is that desk in? Your kid's room? Taking up his entire closet? He must be stoked on that.

So anyway, decent looking joint, decent square footage (although these photos make it look incredibly cramped), and only asking $259 per square...why no sale?

CHOO CHOO! MAKE WAY FOR THE LOCATION LOCOMOTIVE, Y'ALL!

In general, I tend to view 7th street as an imaginary dividing line between "Desirable" Long Beach and "The Other" Long Beach.

It seems like you can take two identical properties and if one is on the "beach" side of 7th it will immediately enjoy a substantial price premium. I mean, hell, it's just a street, right? But that's the way it goes, and that's why what you buy is as important as where you buy.

As mentioned in prior posts, I believe there is a lot more to the "Location, Location, Location" cliche that realtors love so much. To wit:

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).

He didn't exactly knock it out of the park on any of these counts.

Location #1 - This neighborhood isn't terrible (it's on the good side of Redondo, at least) but I guarantee you any potential buyer would rather pay more to be on the "good" side of 7th. Just goes to show, it doesn't matter what kind of deal you got, when you buy a house you also need to consider what future buyers are going to look for when you need to sell.

Location #2 - It's barely "within" the neighborhood--it offers very little interior protection from one of the busiest thoroughfares in the city.

Location #3 - It's right across the street from a school. That means school buses and car-crammed parent drop-offs twice a day, and considerable noise from the playground if you work from home.

But even if you disagree with my assessment of the Three Ls for this property, here's something absolutely every reader must concede:

Considering he paid $400,000 for this place, the Location, Location, Location is an epic Fail, Fail, Fail.

Pricing history:

Oct 21, 2009 - Price Changed $299,000
Oct 13, 2009 - Price Changed $340,000
Sep 15, 2009 - Price Changed $377,000
Sep 08, 2009 - Listed $399,000
Feb 17, 2009 - Delisted
Aug 18, 2008 - Listed
Jul 27, 2005 - Sold $400,000 (+29.5%/yr)
Aug 17, 2001 - Sold $144,500 (+14.8%/yr)
May 20, 1997 - Sold $80,500

I guess he didn't think anything was strange about the previous owner banking nearly 30% per year in appreciation. I'm assuming the 2001-2005 owner was the one who upgraded the unit, but come on. That's a conspicuous amount of money for a place that sold for just $80,000 during the last housing bottom.

Our featured seller, after three years of ownership and believing the bubble was still alive and well, listed it in August 2008 for a price high enough to deter buyers for six months. Then, after having no success with his WTF price, he promptly took it off the market.

And kept it off the market.

DURING THE ENTIRE SUMMER SELLING SEASON OF 2009 WITH INTEREST RATES AT RECORD LOWS.

Smart! Who's your realtor?

Then, after hearing all the great news on CNBC about the economy and housing "making a comeback," he slapped it back on the market last month for $1,000 less than he paid in 2005.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

How'd that work out for you?

I already know the answer: Not bloody well.

That's because the price cuts started in earnest a week after relisting, and continued down to today's asking price of $299,000. Shockingly, that price, a massive 25% decline in value, puts this lil' buddy into short sale territory.

And by "short" I mean, "the bank must be soiling its tightey whiteys."

That's because even if the lender approves this price, I still don't think buyers will bite. Besides the fact that most shoppers would rather fuck a bowl of scorpions than mess around with a short sale, the sold comps are absolutely killing this guy. Peep:

$220,000 680 Grand Ave Apt 103 Sold on May 18, 2009
0.13 miles 2 bd / 2 ba 855 Sq. Ft.

$250,000 648 Coronado Ave Apt B Sold on May 20, 2009
0.25 miles 3 bd / 2 ba 1,200 Sq. Ft.

$183,000 420 Redondo Ave Unit 204 Sold on Jul 29, 2009
0.31 miles 1 bd / 1 ba 932 Sq. Ft.

$195,000 420 Redondo Ave Unit 207 Sold on Jul 30, 2009
0.31 miles 1 bd / 1 ba 883 Sq. Ft.

$440,413 3600 E 4th St Unit 202 Sold on May 14, 2009
0.33 miles 2 bd / 2 ba 1,320 Sq. Ft.

$215,000 1100 Newport Ave Unit 407 Sold on Jun 16, 2009
0.35 miles 2 bd / 2 ba 1,138 Sq. Ft.

$215,000 1100 Newport Ave Unit 407 Sold on Jun 16, 2009
0.35 miles 2 bd / 2 ba 1,138 Sq. Ft.

$390,000 3637 E Vermont St Sold on Jun 05, 2009
0.35 miles 2 bd / 1 ba 888 Sq. Ft.

$125,000 1100 Euclid Ave Apt 317 Sold on Jul 16, 2009
0.37 miles 2 bd / 2 ba 820 Sq. Ft.

$195,000 1100 Euclid Ave Apt 313 Sold on Sep 24, 2009
0.37 miles 2 bd / 2 ba 843 Sq. Ft.

Yowch.

It's notable that the only two units that sold for more than $299,000 are located--surprise, surprise--on the "good" side of 7th Street in the more desirable 90814 zip code.

Do you see my point?

Given the competition (not to mention the community laundry and solo garage space), to say this place has no shot at selling at this price is like saying a patient with necrotizing fasciitis has "a bit of a skin problem."

**UPDATE: You know what I just noticed? Look at this picture again and focus on the right side:
A Convict Cage (or as FreedomCM calls them, "Ghetto Gates") on the front door doesn't exactly emanate a warm, safe feeling, and as far as I'm concerned is a deal killer for something anywhere near this price range. The "Other" side of 7th already has a perception among many as being less safe, and (justified or not) this only solidifies that predisposition.

More Free Ponies!

Calculated Risk: Home Buyer Tax Credit to be Extended

Investment Properties?

Reader littletiger1969 writes:

Hi El-Bee, This is littletiger. A bit off topic. I was recently at Las Vegas and talked to one of the dealer at the table. She told me that she just bought a 3 bedroom 2 bath condo in Vegas with her brother as a investment for $60K. After I came back, I did a quick Zillow check and found out that she may have even "over-paid". Maybe U can have a "special Vegas" posting just to contrast how absurd RE in Long Beach has become.

Great topic, littletiger. This is something I've been meaning to get into. $60k for a 3 bed/2 bath? What's not to love?

Well, for one, they bought it as an "investment." Huge mistake. Just exactly who are they going to rent to?

Unemployment is insane in Nevada--it doesn't matter how "cheap" your mortgage payment is if you can't find responsible, gainfully employed tenants.

If you told me that they bought it to live in, I would applaud their decision. Even if they "overpaid" for it (tough to imagine at $60,000), they would have an incredibly low mortgage payment (under $600 assuming FHA) and would likely have their home paid off in 15 years depending on how aggressive they were.

Another consideration besides unemployment is fierce competition from other "investors." Everybody and their slow uncle are out in Las Vegas buying "investment properties" for "dirt cheap," hoping to nab those perfect renters who will sign 5-year leases and be model tenants.

Well guess what? To attract that ever-shrinking base of qualified tenants with good credit scores and cash on-hand for a security deposit, you're going to have to drop your asking rent to compete with those thousands of other new landlords. To be a prospective renter in Vegas (or just about anywhere) right now is like being a bikini-clad Natalie Portman at ComicCon: Everyone wants a piece.

Hence, plummeting rents. Which is not a concern if we're finally at a bottom, but I certainly don't see any sign of rent deflation coming to an end tomorrow. So, if you buy a condo with certain assumptions in mind, you may quickly find that the reality of the rental market and general economy will blow those assumptions out of the water.

On a related note, as condo prices in Long Beach have continued to get hammered, I've been increasingly tempted to buy one all-cash as an investment property. And with no mortgage, all I have to do is cash a check every month, right? Piece of cake!

Ah, but therein lies the rub. Any condo you can buy for $60,000 is going to be in a shit neighborhood with shit tenants. Sure, you might get lucky and find renters who will take care of the place and refuse to let their extended family move in, but are you really willing to take that risk?

And what about the other knucklehead "investors" buying up apartments in the same building with the same idea? Anyone who bought at auction or got a better deal than you will be able to undercut you on rental rates. Whoops, there goes your profit margin.

Ultimately, my philosophy is: Never buy a property as an "investment" that you wouldn't be willing to move into if times got tough or you couldn't find reliable tenants.

Trust me, any place you can buy for $60,000 in Long Beach is not someplace you want to live yourself. Unless your name is Marion Cobretti.

The Detriments of Delusion

Likely owing to the fact that I am constantly blathering about Belmont Heights bungalows, an anonymous commenter requested that I feature this property:

3135 E 3rd St, 90814
Price: $657,000
Beds: 2
Baths: 1
Sq. Ft.: 1,003
$/Sq. Ft.: $655
Lot Size: 3,375 Sq. Ft.
Year Built: 1920
MLS#: P702470
Source: SoCalMLS
On Redfin: 46 days
Description: Absolutely Adorable Home in the Heights! Completely remodeled throughout while still maintaining the charm of its California Bungalow style! Hardwood floors throughout, plus gorgeous slate faux fireplace. Bathroom is completely upgraded with marble tile bath/shower combo. New fixtures and is extremely spacious. White Marble kitchen counters with all white cabinets, make the kitchen modern and clean, plus new appliances. Under counter w/d in the kitchen as well. Front bedroom has added loft with new carpet. Forced air heat and Central AC!! Kitchen and Master bedroom lead to amazingly large deck perfect for entertaining! Original refurbished molding, doors and windows! Newer roof, newer exterior paint, and new interior paint! Detached garage has saltillo tile floor which can function as a garage or a home office. Manicured front lawn with landscaping equals great curb appeal!

On what fucking planet can a bathroom in a 1,003 square foot house be considered "extremely spacious"? I mean, it looks to me like I can wash my feet in the tub, brush my teeth at the sink, and expunge my bowels all at the same time.

But I'm not chugging Haterade--this place is awesome cubed.

New roof, kick ass yet tasteful upgrades, decent floors, clean, simple kitchen, etc. I'm in love. The original windows might bum out some shoppers in this price range, but in this case I think it works.


And I would like to congratulate this listing agent on a properly spelled and informative description. It's not perfect (Title Case issues and a "!!" thrown in), but compared to what we usually see here at the Long Beach Housing Blog this is a freaking masterpiece.

But let's cut right to the marrow: This place is insanely overpriced.

INSANELY.

$655 per square foot?
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

The neighborhood is amazing, but this seller is obviously letting that get to his head. Let's not forget there is only one bathroom, it's on a postage stamp lot, and doesn't have a garage. For $657,000? Really?

So, considering no other nearby comparable properties are asking anywhere close to this greedtastic price, how exactly did the seller conjure up his $657,000 demand?

Feb 28, 2007 - Sold $659,000

Oh.

I really hope this seller wasn't the one who put in the upgrades because a sale at this price will mean instantaneous detonation of his bank account. Like, a-wine-cask-full-of-TNT detonation.

But even if he didn't put any money into it (if the '05 buyer was the one who shelled out for the upgrades, he still walked with at least $100,000 when he sold to this chump! Nice work!), he's still in deep guano for two reasons:

1) He has to pay 6% sales commissions;
2) There's no way in holy hoagie hell this place will sell for this Glory Days asking price.

Just look at the recent sales:

$460,000 3226 E Vista St Sold on Jun 10, 2009
0.16 miles 2 bd / 2 ba 924 Sq. Ft.

$695,000 366 Orizaba Ave Sold on Jun 11, 2009
0.17 miles 2 bd / 1 ba 1,112 Sq. Ft.

$527,000 335 Gladys Ave Sold on Jul 28, 2009
0.2 miles 2 bd / 1 ba 1,060 Sq. Ft.

$575,000 329 Temple Ave Sold on Jun 10, 2009
0.25 miles 2 bd / 1 ba 1,062 Sq. Ft.

$355,000 435 Orizaba Ave Sold on May 20, 2009
0.31 miles 2 bd / 1 ba 1,100 Sq. Ft.

$425,000 211 Newport Ave Sold on Jun 09, 2009
0.37 miles 2 bd / 1 ba 790 Sq. Ft.

$400,000 630 Obispo Ave Sold on Jul 22, 2009
0.4 miles 2 bd / 1 ba 1,078 Sq. Ft.

$452,000 627 Loma Ave Sold on Aug 05, 2009
0.47 miles 2 bd / 1 ba 1,088 Sq. Ft.

$410,000 530 Grand Ave Sold on Jun 24, 2009
0.53 miles 2 bd / 1 ba 773 Sq. Ft.

$321,000 714 Gladys Ave Sold on Aug 07, 2009
0.53 miles 2 bd / 2 ba 1,101 Sq. Ft.

Wow. Only one house during the last six months sold for more than $657,000 and it sported an extra 109 square feet on a bigger lot and was located in an interior location of the neighborhood--not right on 3rd Street.

Whatever you're smoking in that little loft up there, it must be the kind!

But unless you stuff that loft to the rafters with the sticky icky as a sales concession, best of luck trying to unload for your wishing price.

**I'd like to give a special shout out to Sushi Studio! They finally re-opened the PCH location (I've been making the trek to I Luv Sushi in Lakewood in the meantime--same owners) after a gnarly fire (gosh, was that a year ago?) and I'm glad they're back. Parking still sucks, but to me it's completely worth it. If you've never been, give it a try. The Monkey Roll might just blow your mind**

ARTICLE: Long Beach police probe fatal shooting of 18-year-old

http://www.presstelegram.com/ci_13618800">LONG BEACH -- Police today were investigating the shooting death of an 18-year-old Long Beach man gunned down outside of an apartment complex.

The victim, identified by friends and family as Pablo Marquez, was shot at about 11 p.m. Wednesday in the 1800 block of Henderson Avenue just north of Pacific Coast Highway, police said. Marquez was pronounced dead at the scene.

Police have not yet released suspect information or a possible motive for the shooting.

Friend Ivan Solares said Marquez had stepped outside to smoke a cigarette when he was shot by an unknown assailant. Marquez was the father of a 6-month-old girl named Samantha, family said. He had just turned 18 on Oct. 8.

"He was looking for work to support his daughter," Solares said. "He was a good friend and a caring person."

...

Antionette Moore, who manages the apartment complex on the block where Marquez was shot, said the neighborhood is plagued by drug addicts, but shootings are rare. The incident occurred about two blocks south of the recently opened Wrigley Community Garden.

Residents there are now shaken.

"I don't even want my daughters going outside," she said. "We're all scared."

Man, 18 years old. Tragic.

The Fail--ERRR...Fall Selling Season

1710 E Florida St, 90802
Price: $375,000
Beds: 2
Baths: 1
Sq. Ft.: 960
$/Sq. Ft.: $391
Lot Size: 2,560 Sq. Ft.
Year Built: 1920
MLS#: S593140
On Redfin: 5 days
Down Payment: $75,000
Income Requirement: $107,000
Monthly Nut: $2,100
Description: Nice cozy REO home with hardwood floors throughout, walk-in-closet in each room. BRING ALL OFFERS!

A for effort on that description, pal! But next time you should try being less verbose. I mean, 17 words is a little overwhelming for potential buyers.

And thanks for photos of the bathroom. Considering it's the only baño in the house, I'm sure buyers don't really care. Nah, they're probably much more interested in doing their toilet business outside. One look at that dead grass and it appears the previous owner did too!

Again, you know what it means when the bathroom (especially the only bathroom) isn't included in the photos: IT'S AN UTTER DISASTER, RIDDEN WITH MOLD AND PESTILENCE.

The pricing history is interesting. The 2004 buyer paid $396,000 (for this place? Yeef) and three years later managed to edge out a profit of, uh, nothing. After commissions, all he had to show for three years of ownership was a $5,000 loss. But hey, at least he was rid of his albatross and had already made it someone else's problem. Namely, the fool who believed this place was worth $420,000 in 2007.

Within three months he attempted to flip it. Two months after that he cut the price and began his downward spiral into the abyss known as the Great Housing Bubble Bust.

Oct 18, 2009 - Listed $375,000
Sep 21, 2009 - Sold $336,363
Aug 22, 2008 - Delisted
Aug 20, 2008 - Relisted
Jul 29, 2008 - Delisted
Feb 08, 2008 - Listed
Jan 16, 2008 - Delisted
Dec 25, 2007 - Price Changed
Oct 30, 2007 - Listed
Aug 01, 2007 - Delisted
Aug 01, 2007 - Sold $420,000
May 24, 2007 - Price Changed
May 13, 2007 - Price Changed
Apr 29, 2007 - Listed
Aug 17, 2004 - Sold $396,000
Jul 08, 1994 - Sold $60,000

The bank took it back in September for $336,363--ostensibly the remaining balance on the loan--and promptly hosed it down and plopped it on the MLS hoping to squeeze out a $38,000 profit.

Hello? Have you seen the neighborhood this house is in? If you had, you would seriously rethink your $391 per square foot demand.

As a reminder, for a buyer to realistically afford a $375,000 house, their household income would need to be $107,000! Not many residents are pulling down that kind of coin in this neighborhood, and if they are, they sure as hell aren't looking for a place like this.

Frankly, the bank should be ashamed of itself for this ridiculous asking price. It's simultaneously one of the most expensive houses around and one of the dumpiest.


This place is a wreck, with the only discernible upgrade being vinyl windows and a smattering of mismatched hardwood flooring. Any buyer will have to set aside a considerable amount of money each month to cover the deferred maintenance (it's obvious that none of the bubble buyers put much into this house) and the ongoing repairs on an 89-year-old house. Not to mention about $30,000 to make it a house worth coming home to.

Translation: There is no way in holy hell this makes investment sense (cents?) at $375,000. Not even close.

Oh well, I guess trying to gank a nice little profit was worth a shot. But as we enter into the slow sales season, I have a feeling it's going to take some considerable price cuts to move this thing. And if the lender doesn't act soon (guaranteed) then they're going to take a bath a second time.

Frankly, I think this lil' buddy has potential. But most definitely not at this price. Try half off.

Ticket to the Future

So, this weekend The Lady and I were down at Belmont Brew Co. enjoying a delicious beer after a day of errands (she had the Marathon, I had the Oktoberfest). Well, we parked in the adjacent (you know, the one in front of those moldy-ass ocean-view condos) and failed to see the payment machine on the other side of the lot. Who knows what we were thinking, but for whatever reason we didn't think it strange that there were no meters.

Anyhow, after we left BBC we discovered a crisp, neatly packaged parking ticket under The Lady's windshield wiper. Oh well, we had a brain fart and we'll pay the price.

I opened it up to see:

"Time limit exceeded. Fine: $46."

Forty six fucking dollars for a half an hour of parking?

WTF?!

That shit is outrageous!

And today while driving on Harbor in Costa Mesa, I saw a motorcycle cop pulling over an Escalade. My first thought was, "Bummer for that dude. Wonder what he did."

After running a few errands (I know. More errands. I've been traveling a lot which means a grip of errands when I'm actually home) I headed down Harbor in the opposite direction. Lo and behold there was another motorcycle cop driving down the street.

And the only reason I know it wasn't the same officer is because that dude was on the other side of the street pulling over a Buick now! So you basically have at least two motorcycle cops doing hot laps on Harbor all day issuing tickets to as many drivers as possible.

I no longer had to wonder what the guy in Caddy did to get pulled over because it didn't matter. That poor son of a bitch was getting a ticket no matter what.

Because with tax receipts hitting all-time lows, cities have no other source of revenue.

So expect fines for minor street sweeping tickets to become outrageous, more speed traps, more chickenshit fees, more utility surcharges, more cash cow red-light cameras, and more motorcycle cops assigned to busy thoroughfares for no other purpose than writing tickets. Don't worry, taxes will eventually be hiked too (the sales tax already went up to close to 10%) to pay for budget and tax receipt shortfalls, but for now I would prepare for more attempts to bilk taxpayers for hard earned cash that they already have less of these days.

Born Again Buyers

Lately Jim the Realtor has been documenting the current "frenzy" of bidding and buying activity out there.

From what I can see, there are several key reasons for this "buying frenzy" (despite buyers likely being aware they are catching a falling knife), including:

1) Incredibly low inventory (in Long Beach, it's down 36% since last year!);
2) Government handing out free ponies with the First-Time Home Buyer tax credit (with a very loose definition of "first-time") which may expire in November;
3) Incredibly low (and reckless) down-payment requirements from the FHA;
4) People, like me, who have been priced out of the market for nearly a decade now (unless we took out wonky interest-only Option ARM suicide loans to buy properties at 6-10X income) and are simply tired of waiting and putting their lives and goals on hold (and I don't blame them); and
5) Prices seem pretty attractive compared to peak "values."

And I'm sure many of you have been asking yourself: Dang, with a 12.2% unemployment rate and stricter lending requirements, just how many new, qualified buyers can possibly be left?

Well, there was another factor that I hadn't really thought about. I heard on the radio tonight that a short sale only remains on your credit rating for a year-and-a-half.

A YEAR-AND-A-HALF!

That's nothing. And it means all the people who walked away Scot-free from their obligations when the shit hit the fan in 2007 and 2008 are suddenly born-again qualified buyers! So, with the FHA(IL) providing an avenue for the credit-challenged, low down-payment requirements (which can be satisfied by the FTHB tax credit), and incredibly loose definitions of a "qualified" buyer...the answer to the question of how many buyers are still out there is: A lot more than you can ever imagine.

FHA AOK'D WTF FSBO

327 Chestnut Ave, 90802
Price: $223,000
Beds: 2
Baths: 2
Sq. Ft.: 910
$/Sq. Ft.: $245
Year Built: 1990
Listing #: 22197353
On Redfin: 47 days
Description: Upgraded 2 Bedroom 2 Bath Top Floor Private End Unit with two Balcony patios with City Light Views. Master has private bath. Pergo Flooring throughout. Western Exposure give lots of light and beautiful sunset views. Stainless Steel and black appliances included. Stove, Dishwasher, Side by Side Refrigerator. Pricess Court is a secure building with Underground Parking with 2 spaces also additional spaces for guests. Three blocks from beach area and Pine street with theateres performaning arts, Hotels Conventions Center restaurants Nightlife next to the Pike. FHA approvedand appraised for full sales price

"Pricess"? Dude, you don't even know the name of your complex?

"Theateres"?

"Performaning"?

I mean, what language is this description written in? It's good to know that it's not just realtors who are illiterate dolts.

I've said it before, but it bears repeating: For-sale-by-owner listings consistently out-greed, out-delusion, and out-my-place-is-special than realtor-listed sellers.

Without fail.

First, these photos are pathetic:
More wall than kitchen, way to go Ansel Adams!



And way to highlight whatever the hell is going on with the area where tile meets floor. Watch your step!


TURD CHECK!

Come on, bro. Say what you want about realtors' lack of work ethic and horrendous, frankly embarrassing marketing skills, but only a FSBO could screw things up this badly.

Maybe his philosophy is, "Why should I pay someone to royally fuck up the marketing of my property when I can do that just fine on my own?"

One look at the nearby competition, and it's clear this guy thinks his shabby, cramped apartment is special:

$169,000 327 Chestnut Ave #106 (Hi neighbor!)
0 miles 2 bd / 2 ba 990 Sq. Ft.

$160,000 335 Cedar #208
0.08 miles 2 bd / 2 ba 877 Sq. Ft.

$185,000 350 Cedar Ave #309
0.12 miles 2 bd / 2 ba 1,016 Sq. Ft.

$165,000 401 W 5th St Unit 2b
0.13 miles 2 bd / 2 ba 956 Sq. Ft.

$219,900 640 W 4th St #112
0.2 miles 2 bd / 2 ba 915 Sq. Ft.

$332,640 640 W 4 St #203
0.2 miles 2 bd / 2 ba 945 Sq. Ft.

$144,900 535 Magnolia Ave #117
0.2 miles 2 bd / 2 ba 920 Sq. Ft.

$140,000 535 Magnolia Ave #312
0.2 miles 2 bd / 2 ba 966 Sq. Ft.

There is only one nearby listing that exceeds our FSBO's absurd demand, and that clueless bastard has no shot at selling at his 2004 ask (75 days on market).

The cocksure hubris of this FSBO's pricing strategy is emanating like those squiggly stink lines from cartoons.

Just check out this smug closing line:

"FHA approvedand [SIC] appraised for full sales price"

This guy is attempting to use the FHA as third-party credibility to justify his ridiculous demand. But, the FHA has clearly shown they have absolutely NO FUCKING IDEA what they're doing.

To wit:

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward Pinto, a former Fannie Mae executive, said in testimony prepared for the hearing. Mr. Pinto, who was the chief credit officer from 1987 to 1989 for Fannie Mae, went further than most housing analysts and predicted that F.H.A. losses would more than wipe out the agency’s $30 billion of cash reserves.

Need further evidence? Apparently when the (soon-to-be bailed out by us taxpayers) FHA appraised this place for the full sales price of $223,000, they forgot to check the nearby comps.

And by "nearby" I mean IN THE SAME STINKIN' BUILDING:

$140,000 327 Chestnut Ave Apt 112 Sold on May 14, 2009
2 bd / 2 ba 860 Sq. Ft.

$200,000 327 Chestnut Ave Apt 210 Sold on Aug 24, 2009
2 bd / 2 ba 1,010 Sq. Ft.

The latter property is 100 square feet larger and still sold for $23,000 less! So after #210 was appraised for, and sold for $200,000, how exactly did the FHA determine the FSBO in the same building was worth nearly 25k more?

The Federal Housing Administration: Your taxpayer dollars...at lunch.

A BEAUTIFUL BUNGALOW BUNGLED?

Hi puppy!

219 Belmont Ave, 90803
Price: $849,000
Beds: 3
Baths: 2
Sq. Ft.: 1,950
$/Sq. Ft.: $435
Lot Size: 6,150 Sq. Ft.
Year Built: 1920
MLS#: P705713
On Redfin: 270 days
Down Payment: $169,800
Income Requirement: $243,000
Monthly Nut: $4,700 - $5,100 (depending on financing)
Description: PRICED TO SELL!!! REDUCED $80,000!! THIS BEAUTIFUL CALIFORNIA BUNGALOW IS A MUST SEE! COMPLETELY REFURBISHED BOTH INSIDE AND OUT, WITH ORIGINAL BUNGALOW CHARM KEPT INTACT. ORIGINAL HARDWOOD FLOORS THROUGHOUT, REFINISHED TO PROTECT THEIR TIMELESS BEAUTY. FRONT & BACK YARDS NEWLY LANDSCAPED, W/LARGE BACKYARD INCLUDING SPACIOUS WOOD DECK. OPEN FLOOR PLAN WITH LARGE WINDOWS AND NATURAL SUNLIGHT. 3RD BEDROOM FEATURES FIREPLACE AND FRENCH DOORS OUT TO GARDEN, CAN BE USED AS MOTHER-IN-LAW UNIT W/SEPERATE ENTRANCE (HAS OWN GAS & WATER HOOKUPS). DEVELOPMENT OPPORTUNITIES INCLUDE BUILDING 2ND STORY FOR LARGER HOME OR ADDTL INCOME UNIT (R2 LOT). RECENT UPGRADES INCLUDE NEW ROOF WITHIN 12 MONTHS, NEW INSIDE PAINT. WALKING DISTANCE TO 2ND STREET WITH AMAZING RESTAURANTS AND SHOPPING, 2 BLOCKS TO BEACH. OCEAN VIEW FROM FRONT OF PROPERTY. WARM, FRIENDLY NEIGHBORHOOD NEAR EXCELLENT SCHOOLS.

"SEPERATE"?

WHY, OH WHY DO YOU PEOPLE INSIST ON WRITING IN ALL CAPS? SERIOUSLY, SOMEONE EXPLAIN IT TO ME. MAYBE THERE IS A LEGITIMATE REASON, THAT ONCE BROUGHT TO LIGHT, WILL FOREVER CONVINCE ME THAT THIS HAS A PURPOSE OTHER THAN ANNOYING THE LIVING, BREATHING SHIT OUT OF ME.

THIS HOUSE IS FREAKING SWEET. I AM HARD PRESSED TO FIND ANY MAJOR FLAWS WITH IT. IT'S BIG (FOR BELMONT HEIGHTS), HAS MASSIVE CURB APPEAL AND A CUTE LITTLE YARD, AND IS IN A KILLER NEIGHBORHOOD.

BUT HE ACTUALLY EXPECTS US TO BE IMPRESSED WITH THIS PROCLAMATION: "REDUCED $80,000!!"

HEY SHIT HEEL, ALL THAT MEANS IS THAT YOU WERE $80,000 OVERPRICED. CONGRATULATIONS ON BEING A TURD-BURGLING GREEDHEAD--AND HAPPILY IDENTIFYING YOURSELF AS SUCH TO THE REST OF THE WORLD.

HEY, YOU KNOW WHAT'S "PRICED TO SELL!!!"? A HOUSE THAT FUCKING SELLS.
IT MAKES YOU WONDER: IF "850,000 IS "PRICED TO SELL," AND HE WAS RECENTLY PRICED AT A WALLET-NUKING $930,000...THEN JUST HOW WTF WAS HIS INITIAL ASKING PRICE TO EARN HIM THESE LAST 270 DAYS ON THE MARKET? $3 MILLION? 10?

IT DOESN'T MATTER. THE FACT IS, THIS DUDE WITH THE SWEET HOUSE AND THE BAD ASS DOG ON THE LAWN HAS BEEN GINGERLY REDUCING THE PRICE FOR ALMOST A YEAR TO NO AVAIL. SO, AFTER THIS LATEST $80,000 REDUCTION, SHOULD HE PLACE A CALL TO U-HAUL AND INVEST IN SOME CORRUGATED BOXES?

UH, MAYBE?

LET'S NOT FORGET HOW AWESOME THIS NEIGHBORHOOD IS. AND ALTHOUGH THE PROPERTY FEATURES A SMALL, SO-SO KITCHEN, THIS PLACE IS CHARMING AND THREE BEDS AND 2,000 SQUARE FEET IN THE HEIGHTS IS HIGHLY DESIRABLE.

ONE LOOK AT THE PRICING HISTORY...

Oct 03, 2009 - Listed $849,000
Sep 12, 2009 - Delisted
May 07, 2009 - Price Changed
Mar 04, 2009 - Price Changed
Jan 14, 2009 - Price Changed
Jan 13, 2009 - Listed
Apr 30, 2004 - Sold $635,000

...AND IT'S CLEAR THAT IF HE GETS AGGRESSIVE (AND DEPENDING ON HOW MUCH HE DUMPED INTO THOSE MILD UPGRADES--WHICH DOESN'T APPEAR TO BE THAT MUCH) HE WILL NOT ONLY GET OUT OF THIS ALIVE, BUT WILL WALK WITH A BIT OF PROFIT IN A BRUTAL MARKET WHERE MOST LONG BEACH SELLERS THAT BOUGHT A FEW YEARS AGO ARE LOSING THEIR SHIRTS (AND PANTS AND SOCKS AND HATS AND ANKLE WEIGHTS AND SHOE HORNS...).

AND THAT'S BECAUSE HE BOUGHT SMART IN '04.

NOW HE JUST NEEDS TO SELL SMART IN '09.

GET OUT WHILE YOU CAN STILL COMMAND A PREMIUM, PAL. KNOCKING ANOTHER $80,000 OFF MIGHT START A BIDDING WAR, OR, WHO KNOWS, IT MIGHT JUST LEAD TO YET ANOTHER PRICE REDUCTION AS FALL REARS ITS UGLY HEAD, CASH BUYERS DRY UP, INVENTORY INCREASES, AND JUMBO FINANCING CONTINUES ITS GRADUAL RESTRICTION.

ALL WE KNOW IS SO FAR $850,000 HASN'T BEEN ENOUGH TO GARNER INTEREST. IT CERTAINLY DOESN'T HELP THAT THE ONLY NEARBY PROPERTY THAT HAS SOLD DURING THE LAST SIX MONTHS FOR ANYWHERE CLOSE TO THIS PRICE WAS IN JUNE--AND SPORTED AN EXTRA 200 EXTRA SQUARE FEET.

BUT I REALLY LIKE THIS PROPERTY AND WILL OWN A HOUSE LIKE THIS IN THE FUTURE, SO I'M ROOTING FOR HIM.

DO YOU HEAR ME??? I'M ROOTING FOR YOU AND HOPE YOU FIND A BUYER!!! OTHERWISE I FEAR YOU'LL KEEP HANGING ON TO THAT DUSTY OLD DREAM OF "SPECIALNESS" AND ENTITLEMENT TO BUBBLE PROFITS AND MISS YOUR OPPORTUNITY TO SELL WITHOUT BRINGING YOUR CHECKBOOK TO THE BARGAINING TABLE!!!

GET INTO THE GAME, BUDDY!!!

Nice One, Magellan

1500 E Ocean Blvd #512
Los Alamitos, CA 90802
Price: $580,000
Beds: 3
Baths: 2
Sq. Ft.: 1,455
$/Sq. Ft.: $399
Year Built: 2000
MLS#: S09103239
On Redfin: 15 days
HOA: $473
Down Payment: $116,000 (assuming lenders "only" require 20% in this building)
Income Requirement: $166,000
Monthly Nut: $3,600
Description: Beautiful unit in a desirable complex, the unit is light and bright it has 2 balconies, beautiful walnut wood floors, newer carpet in bedrooms, and partial views. The complex is pet friendly and has direct beach access, two side by side parking spaces, pool, spa, clubhouse, gym, plus a sundeck overlooking the Ocean and Queen Mary.

Just how incompetent are you when you list the wrong city for the condo you're trying to sell?

Is this a joke? It's like they're throwing meatballs right down the middle for me to hit out of the park.

I know it seems like I talk shit relentlessly about realtors, but come on. How can you blame me? And how can you honest, hardworking realtors out there not be fundamentally PISSED by this lack of professionalism and the effect that has on perceptions of your line of work?

There's no other job in the world where you can have such little attention to detail, a lack of duty to your clients, and a fundamental misunderstanding of your area of "expertise" yet demand so much money for your lackluster efforts.

Hell, all I have is a solid work ethic, an ability to spell, and, you know, identify cities on a fucking map. I'm clearly not cut out for selling used houses.


Good lord, just look at this unbridled dumbfuckery:

Oct 08, 2009 - Price Changed $580,000
Oct 06, 2009 - Price Changed $580,000
Sep 24, 2009 - Listed $625,000
Sep 05, 2009 - Listed $625,000
Sep 02, 2009 - Delisted
Aug 31, 2009 - Sold $625,000
Jul 28, 2009 - Price Changed
Jul 28, 2009 - Relisted
Jun 07, 2009 - Listed
Apr 20, 2009 - Delisted
Apr 19, 2009 - Relisted
Apr 18, 2009 - Delisted
Mar 12, 2009 - Listed
Jan 02, 2009 - Delisted
Dec 21, 2008 - Price Changed
Dec 12, 2008 - Relisted
Dec 11, 2008 - Delisted
Nov 04, 2008 - Price Changed
Sep 30, 2008 - Price Changed
Sep 03, 2008 - Listed
Aug 06, 2008 - Delisted
Jul 09, 2008 - Price Changed
Mar 27, 2008 - Price Changed
Feb 28, 2008 - Price Changed
Jan 29, 2008 - Price Changed
Oct 08, 2007 - Price Changed
Sep 05, 2007 - Listed
Aug 24, 2007 - Delisted
Aug 01, 2007 - Price Changed
Jul 08, 2007 - Price Changed
Jun 21, 2007 - Price Changed
Jun 18, 2007 - Price Changed
Jun 14, 2007 - Price Changed
May 13, 2007 - Price Changed
Apr 02, 2007 - Listed
Jun 28, 2006 - Sold $845,000
Jul 28, 2004 - Sold $699,000
Mar 27, 2003 - Sold $505,000

That property history provides a perfect illustration of the housing bubble and it's inevitable aftermath.

Just look at the action between 2003 and 2006. Ahhh, the good ol' days. Making phantom bubble profits hand over fist. Then fisting the lender and taxpayers after two-and-a-half years of market chasing and an exhausting delist/relist dry hump.

The bank finally took it back in August of this year for $625,000 and within a week had it relisted (it was obviously unoccupied) for--SHOCKER--$625,000 .

That sheer lunacy didn't last long, as the price was just slashed by $45,000. So now, according to this apartment's "value" during the bubble, we're firmly in 2003 pricing.

As always, the question is: Will it be enough?

I'm not sure what rents are like in Los Alamitos, but here in Long Beach, $3,600 a month will get you some pretty sweet digs.

In fact, you can rent ocean-view units (none of this "partial view" horseshit) in West Ocean Two for under $2,500. And you best believe in this shaky economy that rents on luxury apartments are N-E-G-O-T-I-A-B-L-E.

If you are obtunded enough to spend an extra $1,000+ per month for the vaunted pride of "owning" rather than renting a nearly identical unit in West Ocean Two, it's worth noting that "loser" renters will have the same amenity access but won't be responsible for the $473 monthly HOA fine (subject to increases and unable to be written off your taxes).

So, yeah, only a complete moron would think $580,000 is anything but a horrendous, bald-faced rip off. Hey, maybe the listing agent should put in an offer!

Excellent Conditions: UPDATE

The list price was "$150,000" and changed to "$185,000"

A $35,000 price increase? After 176 days on market?

SMART.

Let me know how that works out for you...

*****************************************


Address: 2036 3rd. St #7, 90814
Asking Price: $150,000
Year Built: 1960
Size: 1 beds, 1 baths, 707 sq. ft.
$/Sq. Ft.: $212
HOA Fee: $104
Purchase price: $278,000
Purchase date: 4/2007
MLS#: Y901921
On Redfin: 30 days
Down Payment: $30,000
Monthly Payment: $900
Income Requirement: $43,000
Description: Cute condominium, excellent conditions, second floor. Nice living room with balcony. Short Sale.

"Excellent conditions"? You mean, like, for sailing?

Calling this a short sale is being generous. Assuming the bank approves this price (won’t happen), it will be "short" $128,000, less whatever meager down payment the renter coughed up (sorry, but we have to stop calling people who made interest-only payments to live in houses for a year or two “owners.” They rented money from banks and will walk with no equity, therefore they are renters). A one hundred and twenty eight thousand dollar loss on a 700-square-foot apartment? Cripes!

I don't know what this lady was thinking, but in April 2007, she convinced herself that a one-bedroom, one-bath condo in this neighborhood was worth $278,000. WTF were you thinking?

And before someone points to the baby stuff and chastises me for "attacking someone who was just trying to do what's best for her family"--wait, actually, go ahead and chastise me for that. Because that would be the dumbest thing ever written on the Internet--and that's saying a lot. "Doing what's best for her family" would be renting an affordable apartment and putting the $700 monthly savings into a college fund.

Shoehorning your way into a mortgage you can't possibly afford is the height of irresponsibility.

And speaking of that, to realistically afford this place, she would have had to pull in $79,428 per year.

Here’s a shocker: She didn’t.

The median household income in this zip is $54,170. But that’s household income, usually meaning two workers' combined incomes. A 700 square foot apartment can feasibly only house one adult, meaning she, by herself, needed to make $25,000 more than the average family to stay above water.

Worse yet, she needed to make 25k more than the median income to afford what is quite obviously an old, run down, sub-median property.

Predictably, the $1,700 monthly payment for what basically amounts to a boarding room quickly became unsustainable and now the property is on it's slow march back to the bank (paying $1,700 a month for this dilapidated hovel is like cashing in a $200 Mastro's gift certificate to eat dishwater soup out of a rusty tuna can).

The good news is, now she can do what she should have been doing all along which is rent a nice, affordable apartment in a decent neighborhood and save a healthy chunk of money each and every month.

Maybe she'll stop making payments and will be able to live rent-free for a while to save up even more for her and her family. Banks are so overwhelmed that I'd say she's got at least nine months of deadbeat living to look forward to.

But she needs to realize that short selling is a complete waste of time. It's not as if she'll get a smiley face on her credit score for short selling instead of foreclosing. Her credit will be ruined regardless and her down payment (if there was one) will vanish, and the $42,000 she spent in monthly payments (offset by minimal tax write-offs) is gone too. Those are just the facts and the sooner she accepts them, the better off she'll be.

Because even if the bank approved this short sale price of $150,000 (impossible) this incredibly unattractive property still has further to fall and smart buyers know it.

Remember this nearby seller? He’s also asking $150,000 in a short sale, but he’s been rotting on the MLS vine since September of 2007! That doesn’t bode well for our renter.

Further complicating this apartment's chances of finding a buyer is that it sort of resembles a Tijuana brothel:



And we haven’t even seen the bathroom yet! Don’t kid yourself; excluding bathroom photos is 100% intentional. I unconditionally guarantee it's a disaster.

Any buyer would have to be prepared to undertake a complete overhaul of this outdated mess. I mean, take a gander at the kitchen:


Wait, what the hell?



Um, lady, those don't look like salt shakers.