Tuesday, June 30, 2009
Address: 1780 W 25th St., 90810
Asking Price: $339,000
Year Built: 1977
Size: 7 beds, 3 baths, 2,224 sq. ft.
$/Sq. Ft.: $152
Purchase price: $315,000
Purchase date: 4/2009
On Redfin: 16 days
Down Payment: $68,000
Monthly Payment: $2,000
Income Requirement: $97,000
Description: Nice Home in Nice Long Beach Area This Home Features 7 bedrooms , 3 bath ,2 car garage. Perfect for Large family At this price it willnot Last
In high school, the Carl's Jr. in the Rossmoor Center was the hangout spot. We would hang out after school, take advantage of the free refills, and talk about the trials and tribulations of our teen years.
Anyhow, there was a guy who worked there named Robert. He was mentally disabled but the management was really generous and gave him a job. His disability was such that he was limited to what duties he could perform but the one thing he ACED was delivering food and collecting those little A-frames with the order numbers on them (the kids with classic cars would always swipe the "67" or "68" depending on the year of their car). And he would always say, in his unique voice:
"WOULD YOU LIKE KETCHUP WITH YOUR MEAL?"
Patrons answering in the affirmative would receive piles upon piles of (body temperature--HORF!) ketchup packets from his cornucopia of an apron until politely mentioning they were just fine with 34 packets.
The point of this story? I just wanted to congratulate ol' Robert on finding a new career as a realtor! Nice work, buddy! That listing description is AWESOME! Way to go! Gold star for you!
You know how I know this neighborhood sucks? Robert refused to get out of his car to take listing photos:
And Robert has reason to fear for his life. Last month a police officer was shot just a few blocks from here.
And speaking of grade-A listing photos, check out this little before-and-after action. Now you see the used car (and shopping cart) dealership:
Now you don't!
That's some David Blaine shit, right there!
The previous owner, who purchased in June 2004, plunked down a pants-wetting $535,000. In this 'hood? Yikes.
To their credit, the "owners" of this seven-bedroom gem made it almost five years before the enormous debt service swallowed them whole. Judging by the number of cars in the driveway, they were probably renting out several rooms and moving in extended family members to make ends meet. That, or they were operating a valet company out of there:
Anyhow, purchasing a house at TEN TIMES the median income is unsustainable, and with a mortgage like that you're only one pay cut or a leaky roof away from balance sheet detonation.
The owners eventually moonwalked away (probably after living there rent-free for a while) and the house went back to the bank for $315,000 in April. Six days later the lender listed it for $339,000--just enough to break even after commissions--and it's been sitting there collecting dust ever since.
By the way, at its current asking price, this boarding house is 38% off the 2004 price! Yowza!
And considering Robert is too afraid to get out of the car and can't be bothered to move a shopping cart (sorry, that's just GHETTO) out of the way...what do you suppose Robert thinks the odds are of this place selling for $339,000?
About as good as Michael Jackson performing at his London concerts (too soon?).
Sunday, June 28, 2009
Address: 341 Granada, 90814
Asking Price: $699,000
Year Built: 1923
Size: 3 bed, 3 bath, 1,650 sq. ft.
$/Sq. Ft.: $424
Purchase Price: $415,000
Purchase Date: 4/2002
On Redfin: 4 days
Down Payment: $140,000
Monthly Payment: $4,000
Income Requirement: $200,000
Description: A Long Beach Landmark! This stunning Collision design home features 3 levels of living space with spectacular Lagoon views from almost every window. 1st level features a large kitchen, laundry room, formal dining room, large bedroom and a 3/4 bathroom. 2nd level features large open living room area with tons of windows and light, optional 3rd bedroom and a bath. 3rd level features a huge master suite retreat with vaulted beamed ceilings, a balcony deck, large bathroom, and tons of light. The outside has been recently repainted to show the true uniqueness of this amazing home. The entire home features tons of natural light, wonderful open spaces, front courtyard area, and a 2-car garage.
Weird. I was just in this neighborhood yesterday (happy birthday, D!) and I don't remember seeing this house. You would think this Picasso-esque oddity--ERRR..."landmark" would stand out.
After looking at this exterior photo:
...I was expecting a lot more than 1,650 square feet.
But then I saw this one:
...and it became abundantly clear why the interior dimensions appear so cramped.
Plus, when you click on Aerial View you can really see how the tiny triangular lot affects the interior layout.
The most disappointing thing about this house is that the level of creativity that went into the exterior evidently did not make it to the interior.
Glass blocks? A gray tub? Given the gross 80s cues, it's clear that the current owner, who purchased in '02, was not the one who built this house--he purchased this place as-is from the 1989 buyer.
I have to give credit to owners expressing themselves and building something unique in Long Beach but as I've said before, one person's quirky (and pricey) personal taste means fuckall to potential buyers.
The greatest example of that is this idiot on Park. After a tortuous 684 days on the MLS, documented here, it's clear that there is virtually no market for these custom-built oddities (especially overpriced ones).
If you're planning on living in it forever, shit, build whatever the hell you want. Custom build a place too look like Winnie the Pooh's house if that's your thing.
But don't hold your breath in anticipation of finding a cash-flush buyer who shares your particular love of that honey-chugging charmer willing to hand you a handsome profit for what your particular peculiarities hath wrought.
You know what I think to myself when I see houses like this? "Yeah, if it was dirt cheap I might buy it as a goof." In other words, this kind of look-at-me "uniqueness" is actually a detriment to selling because this level of customization and personal flair can easily put houses in the Only-At-A-Discount category.
Heck, just ask the 1989 buyer. He bought this property for $410,000 in October '89 and (presumably) built it to its current condition. After 13 years of ownership and hundreds of thousands in construction costs, he sold in April 2002 for $415,000--just five grand more than he paid. But the NAR told me home values double every 10 years!
Sure, he successfully found a buyer who shared his quirky tastes, but in order to make the deal happen he had to slash the price to the extent that he lost massive amounts of cash. Will our current seller have to do the same?
Given current sales in this neighborhood, asking $424 per square foot isn't that far off. But, again, the key question is: Will this house require an Idiosyncrasy Discount to sell?
Thursday, June 25, 2009
I'm in West Palm Beach currently, and last night I struck up a conversation with the bartender at the resort. It turns out she, until recently, was a used home salespers--ERRR, real estate agent.
Apparently the resort (currently at only 50% capacity) is trying to sell some of the units as condos, starting from $900,000 and going all the way up to $3,000,000 for the four-bedroom ocean-view units.
To no surprise, in this economic environment they haven't exactly been selling like hotcakes (Florida is arguably in worse shape than California, real estate wise). BUT, the bartender used a realtorese term I have never heard before when trying to justify egregious prices for unfinished condos sporting concrete floors and exposed drywall tape:
Wednesday, June 24, 2009
Address: 1334 E 1st St #1, 90802
Asking Price: $349,000
Year Built: 1955
Size: 2 bed, 2 bath, 1,030 sq. ft.
$/Sq. Ft.: $339
Purchase Price: $70,000
Purchase Date: 5/1996
On Redfin: 5 days
Down Payment: $70,000
Monthly Payment: $2,100
Income Requirement: $100,000
Description: Absolutely stunning Alamitos Beach home located just 1 block from the sand!This incredibly remodeled home offers a gorgeous new kitchen w/ granite counter tops,stainless gas appliances,new dark wood cabinetry w/custom pulls,recessed lighting,new tiled kitchen floors and more!The rest of the home offers impeccable upgrades that include remodeled bathrooms with granite counter top and custom bowl sink,crown molding,recessed lighting,designer paint,newer carpet,wood floors in the dining rooom,dual paned vinyl windows,tiled bathroom floors, all of which are immaculately maintained!This corner unit has walls of windows and only 1 common wall with oversized bedrooms and a nice sized living room to entertain.With low HOA's,direct access from your private garage with additional parking space and a newly remodeled complex with new roof,electric,dual paned vinyl windows,new light fixtures,new front doors,new paint and redone plumbing this is sure to impress and will not last long at this price!
Man, they were so close! If you ignore the lack of spaces after each puncuation mark (quite a challenge, mind you), there is only one typo: "rooom." Ah well.
But the realtor knows a little something about marketing because the kitchen shot is the main photo in the listing, as opposed to, say, this shot of the exterior:
Oofa. Mudfence ugly if you ask me, but eye of the beholder and all of that, right?
This seller bought at the bottom of the last housing downturn and held througout the duration of the Great Housing Bubble. For once, the sales history doesn't document the irrational exuberance of the bubble. Just the opposite: it provides an interesting (and likely prescient) illustration of a bubble bust! Check it:
Sep 25, 1990 - Sold $125,000 PEAK
May 27, 1993 - Sold $114,177 LOSS -3.3%/yr
Oct 20, 1993 - Sold $90,000 LOSS -44.9%/yr
Oct 25, 1995 - Sold $82,248 LOSS -4.4%/yr
May 08, 1996 - Sold $70,000 BOTTOM -26.0%/yr (ouch)
Jun 19, 2009 - Listed $349,000 OH, HI!
Crazy, right? That's probably how sales histories are going to look for the next 5-10 years if the government keeps the misguided "soft landing" policy intact. A slow ride to the inevitable return to basic fundamentals.
Anyhow, the real question is: does this guy deserve a $290,000 windfall for holding this property for 13 years?
That's up to the market to decide, but one look at the Median Condo Values and it doesn't look likely:
Alamitos Beach: $220,000; $265 per square
Downtown: $239,999; $304 per square
90802: $259,000; $322 per square
Long Beach: $234,950; $261 per square
This seller, by asking $339 per square, isn't that far off. Given the quality of the interior and proximity to the ocean, a 10% reduction might be enough to be competitive with nearby sellers and find an impatient Super Summer Selling Season chump. He obviously has a big enough profit cushion to do it.
Unfortunately, looking at recent sales, there doesn't appear to be a big market for $350,000 condos in this 'hood:
$230,000 1273 E 1st St Apt 1E Sold on Apr 10, 2009
0.07 miles 2 bd / 1 ba 878 Sq. Ft.
$217,611 1250 E Ocean Blvd Apt 406 Sold on Jun 02, 2009
0.12 miles 2 bd / 2 ba 1,103 Sq. Ft.
$307,500 1605 E 2nd St Apt 306 Sold on Jun 09, 2009
0.17 miles 2 bd / 2 ba 800 Sq. Ft.
$305,000 1605 E 2nd St Apt 305 Sold on May 29, 2009
0.17 miles 2 bd / 2 ba 800 Sq. Ft.
$299,000 1200 E Ocean Blvd Apt 78 Sold on Feb 27, 2009
0.17 miles 2 bd / 2 ba 1,202 Sq. Ft.
$260,000 275 Esperanza Ave Apt 301 Sold on Jun 09, 2009
0.24 miles 2 bd / 2 ba 1,073 Sq. Ft.
I removed properties that were too small or lacked a second bath, as well as a few Ocean Blvd. luxury units that are obviously not comparables, but it's easy to see that NOTHING has sold for $350,000 this year.
Hey guy, you made a wise move by buying at the bottom of the last bubble, but don't start thinking you're some real estate impresario. After all, if you were truly a savvy investor, you would have jumped ship in 2007 when the market started to turn.
Two years, as many bullet-sweating sellers will tell you, has changed everything. If you, like most Long Beach sellers, coddle the misguided belief that your place is "special," you're going to learn quite quickly how easy it can be to have your profit margin cut in half by a thousand market-chasing cuts.
My fear is you will hold out for the price you "deserve" rather than accept whatever price you can get. Come on, dude! I'm pulling for you! Smarten up and do whatever it takes to get this thing sold (and enjoy your pallet of cold, hard cash).
UPDATE: "Accepting Backup Offers." That was fast. It will be interesting to see what he accepted.
Tuesday, June 23, 2009
Address: 353 N Colorado Pl #205, 90814
Asking Price: $345,000
Year Built: 1976
Size: 2 beds, 2 baths, 892 sq. ft.
$/Sq. Ft.: $387
Purchase price: $350,000
Purchase date: 5/2007
On Redfin: 1 day
Down Payment: $69,000
Monthly Payment: $2,000
Income Requirement: $100,000
Description: Beautiful atrium setting in small, quite, secure, end of cul-de-sac complex. 1 car private garage, blocks to beach. New harwood floors;almost new appliances, great shape. Walking distance to stores, shops, restaurants. Shows well. Cool ocean breezes; pet friendly building. YOUR CLIENTS WILL LOVE THIS ONE IN A GREAT AREA (EQUITY SELLER)...3% COMMISSION.
Let's start with the sales history:
Jun 20, 2009 - Listed $345,000
May 30, 2007 - Sold $350,000
Mar 24, 2007 - Listed
Jan 12, 2007 - Sold $416,839
Aug 05, 2006 - Listed
Aug 06, 1998 - Sold $87,000
After living in this apartment for eight years (pretty much to the day), the 1998 buyer put it on the market. He only paid $87,000 so he might have owned this thing outright by 2006, right? Pure gravy bubble profits, right?
Not so fast, mon chien.
You see, the pre-bubble buyer owned this place during the choicest years of the easy-credit, HELOC, cash-out refi panty party...and he couldn't help but bury his gaping maw in the trough.
See that strange sales price of $416,839 in January 2007? Most houses sell for $415,000 or $420,000--but that kind of number means it went back to the bank. A random collection of numbers generally indicates the remaining balance left on the mortgage.
That's right, my friends. That lunatic, likely through various refinances, sucked the bubble teat for almost half a million dollars. So when he sent the keys back to the bank, he walked away with nothing (well, except for ruined credit and possibly a deficiency judgment on his recourse loans) and had to kiss six years of equity goodbye.
"Oh, but he had medical bills! He had to pay for college tuition! He didn't know what he was signing! He was a victiiiiiiim!"
Oh, please. Stop it with that happy horseshit.
The fact is, this pig refi'd himself into oblivion, lived the high life for a few years, and stuck us with the tab. He deserves our scorn and condemnation, and frankly I'd like to see him in a debtor's prison for 30 years breaking rocks to work off his debt.
But, alas, we as taxpayers, who are ungraciously forced to pick up the tab, will likely see no such relief.
So here is where it gets interesting. The current seller picked up the property for $350,000 two months after the bank listed it in Spring 2007. The lender (and by proxy, the taxpaying public) took a bath on it, but at least this guy got a "huge discount," from the previous price, right?
Well, we'll see about that.
The listing description claims it's an "equity seller" but I have a feeling it's on the razor's edge of becoming a short sale. If it sells for the current wishing price of $345,000, the loss after commissions (3%, in this case) will be -$15,000.
That sounds like a realistic down payment amount for 2007, so maybe he/she will break even.
But that, of course, fully depends on nabbing a new buyer willing to pay $387 per square foot for this tiny, plain, non-upgraded (save the laminate floors) apartment.
When the going rate in this neighborhood is $308 per square, I have heart-attack serious doubts about that happening. Peep it:
MEDIAN CONDO VALUES (PRICE; $/SQ. FT.)
Alamitos Beach: $220,000; $265
East Side: $225,000; $269
90814: $247,450; $308
Long Beach: $234,950; $261
Good luck with that. The fact is, there is nothing this small selling for anywhere close to $345,000.
Plus, this flat probably rents out for $1,400 a month, but the monthly mortgage payment would be at least $600 more. That is an awfully big premium for "owning."
Lastly, the income requirement is $100,000/year! Yowza! This seller, who didn't even last two years before the monthly payments overwhelmed his pocketbook, is a PRIME example of the importance of income requirements.
The traditional calculation for "affordability" is 3x Gross Annual Income = Home Price (I use 3.5x income because there is a difference between what is recommended and what real estate-crazy Coastal Californians will spend).
The median income in this zip is $54,170, making this asking price nearly SIX TIMES the median! That's simply not sustainable. Obviously, given the sale.
The reason banks used to religiously implement the 3x income rule is because they knew that was the sweet spot where a person could afford their payment for 30 years, have enough disposable income to live, and most importantly, could likely survive a disruption in income.
But at 6x income, forget about it. A 5% pay cut, a leaky water heater, or a toasted clutch on the Corolla will all but guarantee distress, missed payments, and foreclosure. With so much money going toward debt service, there simply wouldn't be any room to cut.
Which leads us to where we are today. The seller is trying to unload for close to what he paid in the hopes of salvaging his credit rating and minimizing the losses. But it's a lost cause.
I think this shoebox would be lucky to garner $250,000. If by some miracle he had a $100,000 down payment, he loses that but escapes with his credit.
But if he only put down 5% (which is much more likely in '07), this will be a short sale or foreclosure in no time as he learns just how slim his odds are of getting $345k, and he'll walk away with obliterated credit and (at least) a $15,000 loss.
I'll bet when he bought just two years ago he never thought he'd be face-to-face with those two horrendous choices.
Sunday, June 21, 2009
Oh, that mean, mean, mean, mean, mean green.
Talkin' bout, talkin' bout - cash!
I know that money is the root of all evil,
Do funny things to some people.
Give me a nickel, brother can you spare a dime?
Money can drive some people out of their minds.
For the love of money.
No good, no good, no good.
For the love of money.
Don't sell ya soul for the money - no, no.
-The O'Jays, For the Love of Money
Address: 5216 E. Vista, 90803
Asking Price: $729,000
Year Built: 1941
Size: 3 beds, 1 baths, 1,243 sq. ft.
$/Sq. Ft.: $586
Purchase price: $225,000
Purchase date: 10/1993
On Redfin: 62 days
Down Payment: $146,000
Monthly Payment: $4,200
Income Requirement: $208,000
Description: This 3 bedroom 1 bath fixer property is in heart of Belmont Park. Walking distance to many restaurants, shops, just minutes from the beach and the marina. Hardwood floors throughout, 1/2 block to Lowell Elementary
LOL: "Listing Price Excludes: Dining room light, entry hall light"
SCREW THAT, DEAL'S OFF!
The word "fixer" should never be a descriptor for a house asking $586 per square foot. Not that that nugget of common sense would ever stop delusional Long Beach sellers from their delusional ways.
But don't worry about it, pal, I'm sure there are plenty of doctor/lawyer couples looking to shell out $4,200 a month for the privilege of sharing a bathroom and paying for all of your (obviously substantial) deferred maintenance.
Incredibly, this asking price of $729,000 is a $79,000 increase from the original April demand of $650,000!
Great sales tactic!
Here is where my jaw hit the floor: This (outwardly) cute little house was purchased in 1993 for $225,000, but even if they found a buyer for $729,000 IT STILL WOULDN'T COVER THE LOANS!
If serial refinancing were heroin, before his fatal short-sale overdose this guy was in the "turning-tricks-on-Santa-Monica-Boulevard-and-shooting-up-in-between-his-toes" stage.
The amazing thing is, if he hadn't taken out so much money against the house, a few years from now he would probably own this place free-and-clear.
He would have absolute financial freedom and could retire in this absolutely amazing neighborhood with no house payment. But instead of monetary liberty, our avarice-fueled seller chose a life of unchecked greed, rampant consumerism, and living above his means. The implacable desire for cash money can truly drive people out they damn minds.
There are no other pictures provided, so for the sake of alacrity I'll keep this short. I just thought you'd like to see where your hard-earned tax dollars are going: To myopic, irresponsible turds like this one.
Friday, June 19, 2009
Address: 312 Saint Joseph, 90803
Asking Price: $649,000
Year Built: 1923/2003
Size: 2 beds, 2 baths, 1,000 sq. ft.
$/Sq. Ft.: $649
Purchase price: $355,000
Purchase date: 2/2002
On Redfin: 72 days
Down Payment: $130,000
Monthly Payment: $3,600
Income Requirement: $185,000
Description: All new construction completed in 2003, this beautiful Spanish 2 bedroom, 2 bathroom home has beautiful cherry hardwood floors throughout, new vented gas fireplace, and romantic back yard. Dual function dual-pane Marvin windows. All new bathrooms, custom tile/glass block shower and deep jetted tub. Skylight over tub operates by remote. Ceiling fans in all rooms and solar tubes in living room and kitchen. Customized kitchen cabinets and pull out shelves with Silestone counter tops. Antique stained glass in kitchen. All new kitchen appliances including dual fuel stove, refrigerator, trash compactor, and Franke stainless sink and Moen faucet. Private rear decks off kitchen and master bedroom. New sidelights in master bedroom, central air-conditioning, central heat and insulated roof coating on house. Absolutely everything has been done!
An excellent description! Nice work!
And checking out the photos, I have no reason to doubt the claim that "absolutely everything has been done." This inside of this place looks freaking awesome.
But $649 per square foot?!
This seller purchased in March 2002 for $355,000, constructed a brand new house the following year, got about six good years of use out of it and this April put it on the market for a jaw dropping $699,000.
That greedtarded price resulted in a chorus of laughter from the market, and last month the price was dropped by $50,000, or 7%.
$649,000 obviously hasn't attracted a buyer yet, so what's next?
Well, if the goal is to get out while the gettin' is good, you would price it realistically from the beginning, close escrow in a matter of weeks, and run off into the Barbados sunset with a suitcase full of cash.
But seeing as how this is Belmont Heights, which, as we all have been told, is "immune to market forces," this seller decided to start with an astoundingly ridiculous asking price and slowly chase the market down. You know, just to let everyone know how "special" this place is and to advertise that he doesn't mind potentially losing out on a massive financial windfall so long as everyone is acutely aware of said specialness.
The going price per square foot in this zip is $400. Even if you add a premium for the "newish" construction and considerable upgrades (which, let's be honest, is justifiable here), this guy is still way off. In fact, this is currently the most expensive 2 bedroom listed in this area, a testament to the "uniqueness" of this tiny house.
$499,000 333 Argonne Ave
0.07 miles 2 bd / 1 ba 760 Sq. Ft.
$430,000 4512 E 4th St
0.32 miles 2 bd / 1 ba 875 Sq. Ft.
$579,000 4451 E Barker Way
0.33 miles 2 bd / 1 ba 1,122 Sq. Ft.
$549,000 616 Park Ave
0.37 miles 2 bd / 1 ba 1,147 Sq. Ft.
$620,000 237 Granada Ave
0.39 miles 2 bd / 1 ba 1,014 Sq. Ft.
$570,000 205 Santa Ana Ave
0.69 miles 2 bd / 1 ba 979 Sq. Ft.
$399,000 4037 E 7th St
0.71 miles 2 bd / 1 ba 832 Sq. Ft.
How do you justify a premium like that? Another Long Beach property with an oil field and gold depository in the back yard? Who knows what this guy is thinking.
And check out the sales history:
Oct 25, 1990 - Sold $260,000
Jul 26, 1991 - Sold $67,000 -83.6%/yr (What happened between October 1990 and July 1991? Did it burn down?)
Jun 29, 1998 - Sold $58,000 -2.1%/yr
Mar 22, 2002 - Sold $355,000 62.6%/yr (How do you appreciate nearly 63% per year from '98 to '02? The bubble was crazy, but that's INSANE.)
Apr 08, 2009 - Listed $699,000
So, back to our current seller. I'm not a general contractor, but if construction costs were $100 per square foot in 2003, this guy doled out around a hundred grand to build this little buddy. So he's in for about $455,000.
And you have to imagine he paid down the note considerably in seven years of ownership.
Translation: He has a REALLY nice cushion here. So why is he priced so far above his fellow sellers? I mean, this house is nice. But it ain't that nice.
Only one house this year has been "special" enough to sell for this kind of money, and that was two months ago (not to mention an unemployment percentage point and a mortgage percentage point ago). And it's bigger by 234 square feet and located 2,000 feet from the ocean.
So he's taking a gamble that his (admittedly sweet) little house is even more special than that one (and worth around $1,000 extra per month to own rather than rent). I wish him luck with that strategy.
However, I'm afraid if interest rates get away from the Fed, he'll have missed the boat. And if he hasn't sold by late summer, he'll be scrambling to cut cut cut to find a buyer. And what would have been a monstrous return-on-investment could instead become a crushing loss based on a notion that good taste can defy gravity.
Thursday, June 18, 2009
Tuesday, June 16, 2009
Address: 5571 E Vernon, 90815
Asking Price: $670,000
Year Built: 1952
Size: 7 beds, 5 baths, 3,675 sq. ft.
$/Sq. Ft.: $182
Purchase price: $155,500
Purchase date: 11/2000
On Redfin: 87 days
Down Payment: $134,000
Monthly Payment: $3,900
Income Requirement: $191,000
Description: UPGRADED!! Beautiful two story house, upgrades throughout including granet, hardwood floors and covered patio.
"Granet"? Oh I get it, those "UPGRADED!!" counter tops must be from France.
I mean, what is this place? Ugh, this monstrosity is just about the ugliest house I have ever seen. And although some dough was clearly spent on the interior, it's still not my thing.
I don't know how you guys feel about crown moulding, but I am firmly in the less-is-more category. Otherwise you start applying that crap to staircases:
Next thing you know you're unwittingly applying it to mailboxes and bathtubs.
The worst is when slanted roofs create awkward application and the air conditioning vents are too high on the wall. Then you end up with head-scratchers like this:
And you absolutely must check out the Aerial View of this house. The kitchen is in the emergency lane of the 405.
Remember how I sarcastically suggested this guy should raise the price by $100,000 to lure a seller?
Well today's idiot ACTUALLY DID! In March the original asking price was $575,000, but two months later it was jacked up to $680,000.
What a jackass.
It should be noted that the day after balooning the asking price to a WTF $680,000, he (pointlessly) cut a whopping $10,000 from the asking price. Why bother?
Anyhow, this delusual Long Beach seller, who purchased for $290,000 in 1998, actually believes he deserves $380,000 in profits (not including commissions and however much he spent perpetually adding on to this oddity), which would earn him almost $35,000 per year of ownership!
That's one hard working house!
And even if he gets that ridiculous sum of money, this mulligan of a house will still be a short sale!
So during the course of 11 years, he somehow managed to rack up something like $400,000 in Home Equity Lines of Credit and cash-out refinances? Wow, this is going to get ugly.
Uh, uglier, that is.
And the listing agent sure isn't doing the seller any favors with photos like these:
Uh, you couldn't just move that crap out of the way?
And how about a pic of some of the seven bedrooms? Or how's about a pic of just ONE of the five bathrooms?
Man, as if the asking price and lackluster description weren't bad enough? Have you ever actually sold a house?
Here's my favorite part of the listing:
Listing Price Excludes: All Viking Appliances
Taking your ball and going home, eh?
How the seller can justify that greedtarded price of $670,000 while simultaneously promising to rip out the best feature on eviction day is beyond me. I guess I've once again underestimated the greed-faced delusion of Long Beach sellers.
Great find, Carl!
Sunday, June 14, 2009
Address: 531 Dawson Ave, 90814
Asking Price: $349,900
Year Built: 1923
Size: 2 beds, 1 baths, 764 sq. ft.
$/Sq. ft.: $458
Purchase price: $424,658
Purchase date: 7/2008
On Redfin: 34 days
Down Payment: $119,000
Monthly Payment: $3,600
Income Requirement: $170,000
Description: What a gorgeous Craftsman! This property still features the built in cabinetry in the living area! Do not miss out on this opportunity to own a piece of history at an affordable price. This property features and updated bath with tile everywhere, wood flooring, baseboarding, an updated kitchen with what appears to be granite counters, small loft area, laundry hookups and a covered rear porch can be used as a carport. Priced to sell!
I don't know about owning "a piece of history," but this is definitely a piece of something...
From what I've been able to gather, the bank took back this little buddy last July and has been sitting on it ever since. I guess the lender was waiting for the market to "return to normal." Unfortunately, the misguided wager that bubble pricing would return post haste cost them dearly. By the time they got this green machine back on the MLS last month, the economy had already shed millions of jobs and real estate had been pummeled beyond recognition.
In a normal world, the decision-maker who played tricks to put off the day of reckoning would be cashing unemployment checks. In this world, homeboy probably got a promotion.
Anyhow, would you like to see the anatomy of a Bubble?
Dec 27, 1999 - Sold $83,000
Mar 14, 2001 - Sold $159,500 (71.4% appreciation/yr)
Jul 02, 2001 - Sold $171,000 (26.0% appreciation/yr)
Apr 01, 2004 - Sold $356,000 (30.6% appreciation/yr)
Yes, totally normal appreciation based on solid economic fundamentals, uh-huh, yep, nothing to see here, folks!
It looks like the 2004 owner tried to sell in June 2007, but ended up languishing on the market for a year until the bank finally took it back at auction. The weird part is, El Banco Estupido bought it back for $68,658 more than what the '04 owner paid. In 2008!
Que la chinga?
I have a sneaking suspicion the 2004 owner racked up a bunch of cash-out refi and/or HELOC debt (and the bank, believing that "real estate never goes down," gladly lent it to him) to pay for "what appears to be granite counters."
By the way, "what appears to be" should never appear in the description for something costing $350,000. FUCKING FIND OUT, DUMMY!
And speaking of questionable upgrades, this picture really says it all:
Dude, nice two-inch spaces between tiles. Imagine the buckets o' grout needed to fill in those cavernous gaps!
Man, when the agent says, "with tile everywhere," he really means WITH TILE EVERYWHERE.
This place is a wonderland of confusion. For example, are the bedrooms connected?
And why would the agent include a picture of the laundry hookups? Dude, I'll take your word for it. Does this photo really add anything to this listing? Hell, I can't even tell if the hookups are inside our outside.
Or how about this photo highlighting that the property has been tagged by gang-related graffiti:
Speaking of indifferent laziness and retarded sales technique, someone please explain the marketing benefit of these shots:
That third one is especially egregious. Really, dude? You couldn't take .3 seconds to move the mop out of the frame?
I'll never understand realtors. You are salespeople aren't you?
Could you imagine if an Audi dealership ran ads on their website featuring photos of $65,000 cars with fast food wrappers littered in the foot wells, oil rags plopped on the dashboards and empty Pepsi cans in the cup holders? How long do you think those lazy shits would stay in business?
Friday, June 12, 2009
Address: 3618 E 7th St., 90804
Asking Price: $595,000
Year Built: 1923
Size: 2 beds, 1 baths, 768 sq. ft.
Purchase price: $155,500
Purchase date: 11/2000
On Redfin: 139 days
Down Payment: $119,000
Monthly Payment: $3,600
Income Requirement: $170,000
Description: Cute little 2 bedroom, 1 bathroom California bungalo with detached one car garage. Mixed use residential and commercial zoned, corner lot.
Price per square foot: $775
Dude, by my estimation you're juuuuuuust about finished with a softball-sized crack rock if you honestly believe this house is worth 600 grand. Really? You're entitled to $404,500 in bubble profits? REALLY?
Don't get out much, do you?
You see, pal, while you've been stuffing your face with mini corn dogs and watching American Idol (wait, that Lambert dude is gay?! GET OUTTA TOWN!), the country you live in has been hit by the worst economic crisis since The Great Depression.
And I'm not sure if you've looked out your window lately, but your house is sitting on one of the busiest streets in Long Beach.
And maybe you're not handy with a measuring tape, but it turns out your house is on a 50'x 45' lot.
And by the way, you're asking $595,000 when the total taxable value on this house is only $178,383.
And the average price per square foot of Sold properties in this area is $260, a third of your asking price per square.
Crazy, I know!
And on top of that, if the bubble never occurred and your place appreciated at a generous 4% per year since purchase, it would be worth $221,000 today.
I'm telling ya!
And lastly, the most expensive nearby property is only asking $430,000 and it's a nice, clean, updated property in a highly-desirable area of Belmont Heights!
And, I'm not sure if you've been outside lately, but in comparison your house looks like this:
So, the point of all this is that you should raise the price immediately.
The reason nobody has so much as glanced at your house in 139 days is because it's too cheap for a house in such great shape, in such a stellar location, and with so many features worthy of a substantial premium. Buyers are probably assuming something is wrong with it when they see that super low price of $595,000.
It must be so frustrating to be this close to grabbing the bubble profits you're so obviously entitled to (dude, only $404,500 in profits? You deserve so much more for your time and effort), only to have the thousands of rich foreigners coming here to save the housing market think your place is too much of a bargain.
So, I think you should increase the ask by $100,000 immediately to let potential buyers know this place is truly special. After all, how many houses have this kind of access to 7th Street? And by "access" I mean RIGHT THE FUCK ON TOP OF.
And if in two weeks nobody has bit on your new aksing price, then it's still too cheap and you should raise it another $100k. Afterall, the Super Summer Selling Season is upon us, and you don't want to leave any money on the table do you?
Wednesday, June 10, 2009
Address: 2507 E 15th St #213
Asking Price: $99,900
Year Built: 1988
Size: 2 beds, 2 baths, 842 sq. ft.
$/Sq. Ft.: $119
HOA Fee: [UPDATE FROM CARL]$442
Purchase price: $230,000
Purchase date: 12/2004
On Redfin: 7 days
Down Payment: $20,000
Monthly Payment: $1,050
Income Requirement: $28,000
Description: End unit with upgraded bathrooms and flooring. Laminate wood flooring from the entry to living room and hallway. Ceramic tile flooring in the bathrooms. Indoor laundry. Balcony with a view of Signal Hill accessing to and from both bedrooms and living room. Complex has recreation room, community spa and BBQ. New painting of exterior in progress.
You have to love that cut-and-dry property description typical of short sales. Even the listing agent is rolling back his eyes and asking, "Ah, what's the point?"
"Condo. Has floor and roof. Toilet and shower. Bah, fuck it."
I mean, check out this tell-tale Waving the White Flag photo:
And the agent's eyes aren't the only thing rolling back: The current asking price not only represents a 2000 price, it's actually the equivalent of a 1988 price!
Apr 06, 1990 - Sold $125,500
Jul 19, 1994 - Sold $133,996
Dec 16, 1994 - Sold $83,500
May 23, 2002 - Sold $115,000
Dec 01, 2004 - Sold $230,000
May 04, 2009 - Listed $99,900
Mind you, the 1988 price is what it cost when it was brand new!
Like a 2x4 to the face! Right, Hacksaw Jim Duggan?
If it weren't for the outrageous $442 HOA, this apartment would be dirt cheap. But even factoring the additional $442 month HOA (your HOA fines are almost as much as your principal and interest!), at $99,900, it still pencils out. Let's look at the fundamentals:
LOCAL MEDIAN INCOME: $38,705 (Check! Income requirement is $28,000)
3.5X INCOME: (Check! 3.5X $28,000 is $98,000)
LOCAL RENTS: $1,200 - $1,300 (Check! PITI+HOA is $1,050)
PRE-BUBBLE PRICING: $100,000 (Check! Asking $99,900)
This, my friends, appears to be the bottom for shitty Long Beach neighborhoods. If it gets any lower for 2-bed/2-baths, we're probably in a Depression--and you would have much bigger fish to fry than house-hunting (like, say, stocking up on ammo).
Or is it the bottom?
Just ask this guy who bought in this building late last year thinking the bottom was in:
$148,500 2507 E 15th St Unit 313
Sold on Nov 17, 2008
0 miles 2 bd / 2 ba 842 Sq. Ft.
If our featured squat sale is approved at the current asking price of $99,900, in just seven months the buyer of #313 would already be -$50,000 underwater. That's almost 35% underwater in half a year!
Or, ask this guy:
$149,000 2507 E 15th St Unit 215
Sold on Dec 08, 2008
0 miles 2 bd / 2 ba 877 Sq. Ft.
A mere six months after his "bottom" he's $50k in the hole.
Maybe we should give this 2009 buyer ("I'm telling you Martha, it can't possibly go any lower!") a holler and see how he feels about being $40,000 underwater in a matter of months:
$139,500 2507 E 15th St Unit 120
Sold on Jan 16, 2009
0 miles 2 bd / 2 ba 856 Sq. Ft.
Remember, friends, no matter how great deals may seem at the moment, nobody knows how much worse unemployment is going to get before it gets better. The unfortunate bottom callers I just highlighted obviously didn't think things could get any worse, and look what happened. Don't make the same mistake they did.
And especially considering the numerous short sales in this building (btw, according to the sales history our featured seller is "short" by $131,000!), it's quite possible these still have further to fall and will fall well below rental parity when the bubble finally, mercifully, deflates.
And even if you have no interest in properties in bad neighborhoods like these and are looking in neighboring zips closer to the beach, $100 per square foot for newer construction in 90804 is going to put significant downward pressure on adjacent neighborhoods with older inventory.
Right, tarp-covered Pac-Man?