Sunday, November 29, 2009

Curb Appall


273 ROYCROFT Ave, 90803
Asking Price: $749,000
Beds: 2
Baths: 1
Sq. Ft.: 1,200
$/Sq. Ft.: $624(!)
Lot Size: 4,100 Sq. Ft.
Year Built: 1922
MLS#: P705294
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 61 days
Down Payment: $149,800
Income Requirement (4x income): $187,000
Monthly Nut: $4,100
Description: Totally rebuilt like new in every way possible. A beautifully appointed home with a designer touch and flare for the modern, and lives larger than its size with total openness from entrance to the family room fireplace, and an abundance of natural lighting. Perfect turnkey home for the owner with discerning taste, rebuilt like new thruout and surrounded by mature and professional landscape. New/ upgraded: plumbing, electric, roof, tankless water heater, dual pane windows, interior and exterior doors and hardware, new cherry kitchen and bath. It offers a private yard and stone patio for great bbques with lots of friends. Seriously a don't miss

"Thruout"? As in, "Let me clear my thruout"?

Or, "Hey guyth, whoth's in for thsom thruout fithing thith thaturday?"

"Bbques"? What? Why not just write "BBQs"? Or get off your lazy ass and write out "Bar-B-Ques"? But to sloppily combine the two? I don't get it.

I particularly love the strong ending: "Seriously a don't miss[.]"

Too bad their price is seriously fucking retarded.

Three quarters of a million dollars?

FOR 1,200 SQUARE FEET?!

Where do you think you are, asshole, on a private island in the Mediterranean?

Good lord.

It's nice to see Long Beach meth dealers still doing well in this tough economy, because there is no other rational explanation for this greedtarded wishing price. What is with these bungle-ow sellers and their never ending supply of "I'm Special" juice?



Remember how I used the seller from A Man's Sport (they obviously share a dealer) to illustrate the perils of being one of the most expensive listings in the neighborhood?

Well, today's featured numbskull is suffering from the same delusions of greedeur. He's one of the most expensive 2-bedrooms around. Hell, not even beachfront property is so boldly violating $600 per square foot.

And our Roycroft seller has even more in common with the nutter from A Man's Sport than just avarice. Check the tile-happy bathroom:


And the paint-by-numbers granite and stainless kitchen:


TA-DAAAAA!

Don't get me wrong, this is a sweet little property with an impressive amount of upgrades. But with a $4,100 monthly nut, this thing is egregiously overpriced.

How do I know? Pull up Craigslist and try to find the most expensive 2-bedroom/1-bath bungalow for rent in this area. What did you come up with?

Here's one asking $2,475:


And sure, the kitchen isn't as nice, but you're telling me you'd rather shell out an extra $1,600 per month to cook your franks n' beans in a "nicer" kitchen?

Really?

Because if that's the case, I have some tulips, beanie babies, and Pets.com stock to sell you. You're just the buyer these Belmont Heights sellers (and every other huckster on the planet) has been waiting for.

Look, as long as the Rent vs. Buy calculation is so far askew, we potential buyers might as well hibernate in an Afghan cave because we have a looooooooooooooooooooooooooooooooong way to go before housing prices make any kind of sense.

And speaking of not making sense, here's the thing that really gets me about this place: It's supposedly "totally rebuilt like new in every way possible" (a ridiculous claim because unless it was bulldozed to the foundation and built new, it can't possibly be "rebuilt." Renovated, maybe, but not rebuilt. And who the fuck would tear down a house only to rebuild only 1,200 square feet in a prime nabe?) and with all the effort, time, and money put into improvements and upgrades...this is your idea of curb appeal?

More like curb appall.

Sorry, but that porch and front fa├žade is mudfence ugly considering the price tag.

This seller, who dumped untold wheelbarrows full of cash into his house, purchased in Fall of 2004 for a double-take inducing $675,000. After fixing it up and living in it for five years, he plopped it on the market for $785,000 --with the full expectation that it appreciated a whopping $110,000 ($1,833 per month). That's right: During the worst housing crash this universe will likely ever see.

I'm dying to know what he would ask if the bubble had never burst! A cool mil? Two?

It only took him about a month to realize the house was located on the corner of a noisy intersection and had a useless garage, and he quickly cut the ask by $36,000.

But really, what was the point? It's still woefully overpriced.

I imagine his first demand of $785,000 was his "profit" price. And judging by the estimated costs of upgrades and commissions, his current demand of $749,000 is probably his "break-even" price.

Which means the next inevitable discount will put him deeply in the red.

Pal, if you wanted to walk with any semblance of profits, you're about three years late to the party. Now all you have in store is a fiscal kick to the nuts.

Interestingly, just like the Man's Sport house, this place sold for a bubble price before the bubble even got going. You see, in 2002, this place, ostensibly without any of the considerable upgrades, sold for $519,000. More than half a million bones for 1,200 non-upgraded square feet in '02!

Wow.

Maybe it really is different in The Heights.

And if you believe that, I'd like to thank you for keeping crank dealers in the greater Long Beach area gainfully employed.

19 comments:

  1. I have to tell you that I love your posts. I feel the same way that you do, but maybe not as witty. Keep up the good work....AVS

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  2. Comps are going for high $400s per square foot. Given that he can get $500 a square foot (which is a big stretch at this point, IMHO), this greedtarded seller has 2 options: 1. Lower the price to below $600k, lose money on your home, and (maybe) sell the place after a few more modest price reductions. 2. Don't sell the place.

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  3. Qualified,

    You're right. There is no door #3 (renting it out) because he overpaid near the peak.

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  4. Nice use of the word avarice El Bee. I think the curb view is pretty cool at least they didn't try to "upgrade" the front to something that doesn't match the vintage of the home.

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  5. Here are a few quick observations:

    Buy versus rent prices in desirable coastal CA communities haven't made sense in 30 years. Maybe this time will be different, but count me as a skeptic.

    What makes a community desirable is not just being close to a beach. A house in a shitty neighborhood 3 blocks from the beach is still a house in a shitty neighborhood. This house happens to be in a very good school district, which a lot of parents that can afford it will pay up for.

    Turn-key houses will get a premium price in this neighborhood, because most of the folks that live there can't fix a leaky faucet (I'm not knocking them, I'm one of them). The truth is, it is hard to make enough dough to live in this neighborhood if you work with your hands. Most are some combination of dual income, college grads or other high earners that can deal with high home prices - think lawyers, dentists, etc.

    If houses in Lakewood or the shitty parts of beach close LB are selling for $350-$450K, this house will sell for a significant premium to that. I'm not sure if that is $550K, $750K, or somewhere in between, but it will be alot more than $450K.

    When you buy a house, you are paying for lot value and home value. These 70 year old LB houses are not generally worth a lot more than 70 year old houses in Peoria Illinois (except to the extent a lot more money has been put into upgrades). What is different about a house in Peoria versus Belmont Heights on the good side of Ximeno is the land value.

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  6. Oldtimer,

    All very good points.

    Agreed, these BH houses will absolutely sell for a premium (especially the ones that require absolutely no upgrades)--hell, I'm one of the buyers willing to pay a premium.

    I guess the question that nobody knows the answer to is how big that premium will be when the mid- to high-end finally hits bottom.

    We obviously know $785,000 wasn't it.

    $749,000 doesn't seem to be doing the trick either.

    I think it will be taken off the market long before this seller swallows his pride and takes a substantial loss.

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  7. I rent a 3bd 2ba a few houses away from this place for $2500/mo.

    Oldtimer - I disagree with your first observation. Back around 2000-2001 when prices in this neighborhood were around $300/sq.ft. and rents were not much lower than they are now, it made a lot more sense to buy vs. rent.

    el bee - here's another one
    http://www.redfin.com/CA/Long-Beach/5266-E-Appian-Way-90803/home/7596542
    and the sq.ft includes the detached space connected to the garage. i've had closets bigger than the bedrooms in this house. you'd have to knock $250k right off the top of this listing price to get to around $500/sq.ft.

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  8. I think the problem with a lot of the analysis about Belmont Heights/Shore properties is that people use the wrong comps. Sellers in Belmont aren’t competing with downtown for buyers (unless they’re DINKs that are hell-bent on an ocean view)—they’re competing with the OC. Parents with cash find a lot to like in the OC with the great schools and low crime rates—Belmont parents still have to send their kids to LBC schools and Belmont Heights still has that pesky car theft problem (and that’s to say nothing of the parking situation). And yes, a lot of these areas are mostly surburban tract-home communities that lack the charm of Belmont Heights/Shore and are farther from the beach, but these things may not matter as much to parents intent on their kids going to the Ivies. The ppsf stats in almost every OC neighborhood are lower than the 90803’s—not good news for drawing in the cash-flush, dual-professional families. (And why would a well-to-do family want to cram into a 2/1 at any rate?)

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  9. Oldtimer, are you referring to Wilson High as "very good school district"?


    And just how do you fix a leaky faucet, while we're on the subject! haha I know I couldn't do it.

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  10. "...And why would a well-to-do family want to cram into a 2/1 at any rate?"

    Not only 2/1, but 750K! I'm still convinced, the local realtors target (with a good success rate) same sex couples, not families. There are plenty of safer, less crowded neighborhoods (not too far from Belmont Heights), where 750K buys better schools and at least twice as big houses. Just from the top of my head: Cerritos, La Palma, Cypress, Los Alamitos...

    L_Thek_Onomics

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  11. My wife and are those people you are talking about (dual income professionals with a kid) and you wouldn't catch me dead living in all the planned community loveliness that is the OC. Maybe it's just preference, but I'll trade slight parking and/or theft issues any day for the "Stepford Wifeness" of Irvine and similar ilk. We own a duplex in the Shore and wouldn't trade it for a mansion in Coto de Caza. Also, regarding schools check out www.greatschools.net and search under Long Beach and see the scores for Rogers and Lowell. Not bad for the ghetto.

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  12. LBCee, I'm not as familiar with pricing in the Heights, but in the Shore, $300/sf was about as low as pricing went for starter houses (2+1 bungalows) in the mid-90s. At that nadir in home prices, rents were about $1.50/sf, so a 1,000 sf home would rent for $1400-$1600/month, or you could buy it for a mortgage payment of around $2000 (remember that mortgage rates were a good deal higher then). Tax-affected, it was a push, but back then banks also expected down-payments of 10-20% from home buyers. That was as close as we got to buy versus rent parity. Before and since, it was cheaper to rent.

    Anon, LB is still mostly a bedroom community. Commuting to work or your business is still the main driver of where people choose to live. The nice thing about the LBC is that you can commute to downtown LA or Orange County (or both) in a reasonable amount of time. Los Al is a nice alternative, but there are always trade-offs - beach vs. inland weather; driving vs. walking to shops and restaurants, etc. To each his own. I personally know more people that have moved out of Irvine than moved in. Nice homes, great schools, nice autopia planning, but the neighborhood feel is pretty impersonal.

    Mike, fixing a leaky faucet is a cinch - call your plumber guy. As far as schools, if you live east of Ximeno in the Heights, your kids will go to Lowell and Rodgers. West of Ximeno, your kids will go to Fremont (still very good) and maybe Jefferson (lousy). As for Wilson, it depends on your kid. If they like sports more than reading, it is a pretty good public school. A lot of kids go from Rodgers to private high schools. Again, to each his own.

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  13. olaj - interestingly enough it is a same sex couple that currently lives in this house

    with everything anonymous #3 said, what is it then that is keeping the ppsf so inflated/bubbled in the 90803 and 90814?? i think that's the question at the root of what this blog is all about. is it just the factors described by anonymous #4 and olaj?

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  14. Oldtimer - your analysis looks pretty accurate for the shore. my issue was with the generality of your statement that buy vs. rent ratios haven't made sense for 30 years. there have certainly been drastically varying degrees of not "making sense" within that time period. my point was that in 2000 buying vs. renting made a lot more sense than it does right now. not that it was cheaper or even necessarily that there was parity then, but there was not nearly the disconnect between buy vs. rent that we are seeing today.

    looking at historical data on zillow which goes back only 10 years, average selling prices in 2000 were still 40% to 50% less than they were this past year. however rents at the time were virtually the same as they are today.

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  15. Great comments on this post! I'm on the East Coast and am FLOORED by the cost of living differences here. I know, I know, North Carolina isn't the same as coastal CA, but it provides some perspective re: how propery crazy us Californians are and how much we're willing to give up to "live the So Cal Dream."

    Oldtimer is correct that prices in the Heights and the Shore will likely never truly line up with rents as they do in many other communities, but it WILL get close and I'll be the first to tell you when it does. It happened many times before during various bottoms and once the gov't ponies run out, so shall it be again.

    As far as school districts go? I'm a product of Los Alamitos schools and can tell you( from a completely biased perspective) that I would plunk down a quarter of a Mil in Los Al or Rossmoor for a decently sized house before I ever moved to Belmont Heights--if schooling were my priority. Period.

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  16. What's with this decorative kitchen backsplash trend? It seems like they are all made out of the same small tiles with gold highlights, yuck.

    Talk about 2000 and late.

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  17. "What's with this decorative kitchen backsplash trend? It seems like they are all made out of the same small tiles with gold highlights, yuck."

    There are an amazing selection of mosaic tiles available. Different sizes, shapes and materials, like glass, travertine and marble. (I didn't see any with gold highlights.) They look pretty good, even impressive, when the designer understands the possibilities and limits of mosaics. Also, the installer shouldn't be a semi-trained monkey, but a talented craftsman, even artist, who understands, follows and "spice up" the actual design intent. It's obvious, our flippers didn't hire a designer, nor have the minimal talent to handle it right.

    L_Thek_Onomics

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  18. I hear you that there are less annoying backsplashes out there. However the thing they all have in common is an over decorated blingy look. That will date quickly. For a while most people thought gold packages looked cool on a car. Now not so much.

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