YNGFL: FINAL UPDATE

Sold on 12/17/2010 - $200,900

Wow. What a ride for this welted chunk of excrement.

More than 1,000 days on the market and the bank finally approved a short sale at the price it should have been at all along.

Just look at this lesson in incompetence:

Dec 17, 2010	Sold (MLS) (Closed)		$200,900	--	Inactive CARETS #P701097
Jul 31, 2010	Pending (Backup Offers Accepted)		--	--	Inactive CARETS #P701097
Jul 19, 2010	Price Changed		$199,900	--	Inactive CARETS #P701097
Jun 23, 2010	Price Changed		$219,900	--	Inactive CARETS #P701097
May 19, 2010	Price Changed		$225,000	--	Inactive CARETS #P701097
Mar 03, 2010	Price Changed		$250,000	--	Inactive CARETS #P701097
Dec 30, 2009	Price Changed		$289,000	--	Inactive CARETS #P701097
Dec 30, 2009	Relisted (Active)		--	--	Inactive CARETS #P701097
Dec 03, 2009	Pending		--	--	Inactive CARETS #P701097
Nov 12, 2009	Price Changed		$239,000	--	Inactive CARETS #P701097
Oct 30, 2009	Relisted (Active)		--	--	Inactive CARETS #P701097
Sep 23, 2009	Pending (Pending Sale)		--	--	Inactive CARETS #P701097
Sep 18, 2009	Price Changed		$249,000	--	Inactive CARETS #P701097
Sep 14, 2009	Price Changed		$270,000	--	Inactive CARETS #P701097
Aug 28, 2009	Listed (Active)		$319,900	--	Inactive CARETS #P701097
Aug 01, 2008	Delisted		*	--	Inactive CARETS #3
May 06, 2008	Listed		*	--	Inactive CARETS #3
May 06, 2008	Delisted		*	--	Inactive CARETS #2
Mar 30, 2008	Listed		*	--	Inactive CARETS #2
Mar 29, 2008	Delisted		*	--	Inactive CARETS #1
Feb 29, 2008	Listed		*	--	Inactive CARETS #1
May 25, 2004	Sold (Public Records)		$329,000	--	Public Records

Unbelievable.

In Saturday's post I mentioned that most Long Beach properties are selling for 2003 prices or lower, but that's in prime areas. In less desirable areas, like this one, the pricing is much closer to 2001.

Congratulations to the new owner for sticking it out for so long. Friends of mine just closed on a condo in Huntington Beach after TEN MONTHS spent wrangling with the bank. Because the bank was so slow to get off its ass, they missed out on the homebuyer tax credit and the record-low rates from the last few months.

But they, like this buyer, are paying less to own than it would cost to rent -- and that's cause for celebration.

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The price was "$219,900" and changed to "$199,900"

$220 per square foot for an apartment just 1,000 feet from the sand. This is officially cheaper to own than rent -- even before the tax write-off.

But the bank has no intention of letting the property go for this bargain basement price. Because that would mean recognizing a horrific loss on the books.

So I expect this charade to go on and on and on...with a few price increases thrown in along the way to restart the process. It's been two-and-a-half years so far...I wouldn't be surprised to see this go on until 2012. As long as there are acronym-filled horseshit government programs left to exploit, this could go on indefinitely.

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The price was "$250,000" and changed to "$225,000"

In case anyone is operating under the misguided belief that the banking system has stabilized and housing is poised for a big comeback, I want you to consider that this shitty apartment is still booked at full value on the lender's books -- despite the current asking price being$114,000 less than the 2004 appraised value.

As long as that bullshit is allowed by the government (and in fact actively encouraged by way of mark-to-fantasy FASB policies and various extend-and-pretend programs like HAMP, HAFA, etc.), it will take YEARS for this inventory to actually hit the market. Meaning, returning to true values (based on actual incomes and sizable down payments) will take ages.

I'm tired of waiting -- exhausted, really -- but I'm also no fool. If I could use Other People's Money, this would be a no-brainer. Buy now and walk away if things go south. But I have my own cold, hard cash on the line and as long as countless properties like this are still rotting on the MLS, the buy signal is a long way off.

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The price was "$289,000" and changed to "$250,000"

Well that's one way to get buyers' attention! I guess now the question is whether the bank will actually let it go for nearly $100,000 shy of the original loan amount. I somehow doubt it. But maybe in light of the first-time homebuyer tax credit expiring, they're getting out while there's still some demand left. We'll see.

Sorry for the sporadic posts...I've been on the road all week.

Every time I travel I can't help but observe the local real estate situation. The last time I was in Miami was the summer of 2006, and as I drove around I remember marveling at the incredible number of construction cranes piercing the horizon. At the time I said to myself, "Who are these being built for? Is there that much demand for new housing or even rentals? How does all of this construction make sense?" From what I could tell, the completed towers seemed empty--why build more?

Anyhow, today the cranes are pretty much extinct but at night many of these new buildings were dark, reminiscent of the North Korea Towers in Irvine. Pretty crazy.

South Beach was still fun--it hasn't lost any of its swagger in this downturn.

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Address: 1318 East 2ND St #9, 90802
Asking Price: $289,000
Purchase Price (2004): $329,000
Beds: 2
Baths: 1.75
Sq. Ft.: 909
$/Sq. Ft.: $318
Year Built: 1964
MLS#: P701097
On Redfin: 131 days
HOA: $156
Down Payment: $10,000 (FHA)
Income Requirement (4x income): $72,000
Monthly Nut: $1,700 (FHA)
Description: Sunny & bright, this lovely condo has tons of storage space, a spacious dining room and living room, a separate master bathroom AND A PRIVATE GARAGE with storage that is big enough for an SUV! The home has large rooms that make the entire condo bright and roomy. Located just 2 blocks from the beach, this is perfect as a second home, vacation property or a retreat to enjoy every day!

"perfect as a second home, vacation property or a retreat to enjoy every day"? Looks like this bathroom took a vacation to the 1960s:

HORF!

And when was the last time you saw a white refrigerator?

Maybe I've just become accustomed to stainless fridges, but for some reason that outdated clunker is really jarring!

Pssst! Wanna see the secret to selling a tiny, dumpy apartment with original bathrooms in a shaky economy? Here you go:

December 30: The price was "$239,000" and changed to "$289,000"

Genius!

This short selling grifter has been priced below $270,000 for the last 75 days (50 of which were spent begging for $239,000) with no luck, but for some insane reason decided what this listing really needed was a price jack to $289,000. Because there's nothing buyers love more than a good ol' fashioned cornholing.

Dec 30, 2009 - Price INCREASED $289,000
Dec 30, 2009 - Relisted
Dec 03, 2009 - Delisted
Nov 12, 2009 - Price Reduced
Oct 30, 2009 - Relisted
Sep 23, 2009 - Delisted
Sep 18, 2009 - Price Reduced $249,000
Sep 14, 2009 - Price Reduced $270,000
Aug 28, 2009 - Listed $319,900
Aug 01, 2008 - Delisted
May 06, 2008 - Listed
May 06, 2008 - Delisted
Mar 30, 2008 - Listed
Mar 29, 2008 - Delisted
Feb 29, 2008 - Listed
May 25, 2004 - Sold $329,000 ($270,000 puts it firmly in 2002 pricing--the true market value, judging by the failure to sell for $249,000 is likely 2000/2001)

What kind of sales strategy is that? To paraphrase a line from Tropic Thunder, When trying to sell a house, "everyone knows you never go full retard."

Because that's the only explanation for the current price. All the loanowner has to do is click on their own Redfin link to see that nearby properties are selling for nowhere near this amount:

Downtown: $243,000; $271 psft
Alamitos Beach: $225,000; $262 psft
90802: $249,000; $276 psft
Long Beach: $229,900; $256 psft

And here she is, demanding $311 per square! Based on what, honey?

Anyhow, the point of this post isn't about greed or stupidity, or the living hell of two shared walls, or the difficulties involved with short sales, or the insanity of sellers having negative equity after FIVE FUCKING YEARS OF OWNERSHIP yet simultaneously driving $45,000 luxury SUVs...

No. Although all are at play here, this post is really about pent-up foreclosures.

You see, this property is just two months shy of its two year (!) anniversary on the MLS. It's technically not "shadow inventory" because its been out in the open on the MLS, right? But given the lender's failure to approve a sale in 22 months, it has never actually been "for sale." Meaning it's a bank-owned property in denial.

A monster loss is guaranteed, it just hasn't been booked yet.

And after it inevitably goes back to the bank, it will come back on the market at a greatly reduced price (it seems that most times, once the loss has been realized banks just try to unload). However, REOs dumped on the market crush values, putting everyone else in the area (further) underwater and perpetuating the cycle. It makes perfect sense why lenders are intent on keeping these phantoms in real estate limbo for as long as they can.

And without a mechanism to force lenders to actually approve short sales and process foreclosures (read: recognize losses) instead of extending and pretending for eternity, the market will be absolutely surrounded by these phantom properties for years and years, with no opportunity to actually buy them.

If this seller were smart (ha!) she would have stopped paying ages ago and lived rent-free this entire time. If her lender isn't interested in selling short after two years, they certainly aren't keen on foreclosing.

Naples Nutter

The dearth of Long Beach inventory has made it really difficult to find properties worth featuring, but then I saw this outrageously overpriced pile of shit and just had to put it on the blog.

WISHING PRICE: $499,000
ADDRESS: 6150 East BAY SHORE Walk #10, 90803
BEDS: 1
BATHS: 1
SQ. FT.: 815
$/SQ. FT.: $612
YEAR BUILT: 1965
COMMUNITY: Belmont Shore/Park/Naples/Marina Pacific/Bay Harbor
MLS#: S640717
ON REDFIN: 15 days

HOA: $298

DOWN PAYMENT: $99,800

INCOME REQUIREMENT: $114,000/year

MONTHLY NUT: $2,800
DESCRIPTION: Beautiful sought after Alamitos Bay Shore Condo in the exclusive community of Bay Shore Yacht Club. This Bay front condominium features 1 master suite with upgraded kitchen and bath. Only 15 units in this secured building. Underground parking with storage unit. Elevator to the 3rd floor. Laundry facility onsite. Can watch the Naples Boat parade right from your Bay view balcony and front room. Low association. Rarely on the market. .. .so get you offers in fast!

$499,000 for an 815 square foot apartment.

$499,000 for an 815 square foot apartment with one bedroom.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry, sporting kitchen counters and cabinets like these:

Good lord.

I mean, the fact that he shelled out for a fancy stainless steel oven and microwave but left everything else hideously intact (what, ran out of money for the matching fridge?) -- and then with a straight face claims this is an "upgraded" kitchen -- tells you pretty much everything you need to know about this seller's mental state.

And great news: those horrendous kitchen cabinets are continued in the bathroom!

Absolutely revolting. Shower doors and a curtain. I've never seen that. And I can't recall ever seeing such half-assed "upgrading." Embarrassing.

Again, I remind you, this asshole is asking HALF-A-MILLION DOLLARS.

That asking price would require the potential homeowner, at the very minimum, to make $114,000 per year to reasonably afford this place. You really think a single person or retiree sitting on that kind of loot would seriously consider putting it into this festering wound on the anus of the MLS?

This pricing makes absolutely no sense. The most expensive nearby one-bedroom to sell during the last six months was for $290,000. Given, it wasn't right on the water or in this stellar location, but that's not the point. Do these mongoloids truly believe their shit box is really worth another $209,000 because it's in this particular building?

I guess the question's in the answer, isn't it?

The only comp I could find for the building was a smaller unit with a similarly nauseating kitchen and bathroom that sold last summer summer for a measly $327,000.

Anyone think after viewing the interior photos of this lumpy, low-end yawn box that it deserves a $182,000 premium over that comp?

Really?!

His proximity to the water is clouding his judgment. The fact is, no matter where this building is located this is an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry, sporting kitchen counters and cabinets like these:

It's worth noting that this place was purchased for $385,000 in 2005. Given that the vast, overwhelming majority of Long Beach properties are selling for 2003 prices or lower, this asking price makes even less sense. Their little-r realtor is clearly doing nothing to encourage a realistic asking price, so here we have yet another delusional Long Beach seller clogging up the MLS and wasting everyone's time. If he, for whatever reason, had to lower the price to a level that would actually garner a sale, he'd be lopping off, at a minimum, $150,000 just to get the bidding started.

What do you think, given what you know about this seller thus far, the odds are of that happening?

And the fact that the market-clearing price for such and undesirable property (in a highly desirable, yet lightly traveled by buyers, area) is in reality so much lower than the current asking price highlights the worst part of this whole situation: Because he waited too long to put it on the market, he now has zero room to negotiate. He painted himself into a pricing corner.

And now, unless he wants to write a check to the bank at closing, his only choices are leaving it on the market hoping for a miracle, or tucking his tail between his legs, taking it off the MLS and gritting his teeth every time he makes his roughly $2,200 payment for the next 25 years -- knowing full well that he could rent the very same place for considerably less.

So given those crappy options, why sell in the first place? I'm sure some of you noticed that a 5-year Adjustable Rate Mortgage would have reset and recast earlier this year, making the ability to keep up with that hefty payment considerably more difficult. Coincidence?

Nah, couldn't be.

Irvine Prices in Long Beach: UPDATE II

Here's an oldie but goodie.

In one of the maiden posts on this blog (don't forget the update), I featured this property, sporting a mind-boggling $545,000 wishing price. That 2008 post prompted a decent amount of hate mail (including this idiot whose soaked-diaper logic I eviscerated in a response. The result? We never heard from him again).

Although much has changed since 2008 (not the least of which is the disappearance of whack job bubble-deniers and wrong-headed realtors spitting their delusional venom on this blog) but what has not changed is my ability to ascertain "true values" based on the facts, the numbers, and good old fashioned common sense.

At the time I said:

At $454 per square foot and 260 days on market, this thing isn't going anywhere. Sometimes I get the feeling owners just aren't serious about selling. I don't care how close you are to Belmont Heights, in this zip code the median household income is $30,353. This house is probably slightly above median considering the minor updates, but even if the median income were $50,000 a year, this thing wouldn't be priced more than $250,000.

Well, now it's back on the market as a short sale, priced at $299,000.

Although it remains to be seen whether it will actually drop to $250,000 (honestly, I doubt it. First, when I made that comment very few could foresee the insane amount of taxpayer cash the government would throw at the housing crisis to keep prices inflated. Second, although it's a short sale -- which as we all know means it isn't really for sale by any heretofore relied-upon measure -- $277 per square foot seems reasonable enough to nab a buyer), my craaaaaazy comment two years ago(!), which seemed so controversial at the time, ultimately wasn't that far off.

On the other hand, how did this rambling, incoherent prediction from "HagenindaGHETTO" work out?

Keep the OC folks in OC! Besides, there is more to do here, it's more fun and you don't have to DRIVE everywhere! We deserve to be more expensive! (unless they are buying all cash... then they come first...LOL)

FYI: This home was not a FIXER FLIPPER, the sellers fixed it for themselves but got transferred to Irvine (now that's ironic is it not?). By the way, I know the sellers, they HATE Irvine (even though they are Conservatives) they miss our GHETTO and the fun, and the walking, and the beach and the marina.....

The listing agent will be thankful the stuffed shirt Self Righteous writer of of this BLOG for a PRICE DROP....it always attracts more potential buyers.

As for the Price:
Half the price...??? Good thing you're an accountant. Just run the comps and talk about the FACTS...
The last thing we need are mendacious comments that give a skewed picture of realty. Dig?

Well, dummy, I ran the comps and I talked about the FACTS and it looks like you were, are, and always will be

DEAD.

ASS.

WRONG.

(How does that feel? Be honest.)

P.S. I can't help but thinking how pathetic it is that these fucking idiots waited so long to get real and price to reality and not fantasy. If they hadn't been so ignorantly focused on getting their greasy mitts on their "well-deserved" bubble profits, they might have had a shot at walking away with actual profits. Oh well.

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One of my first blog posts featured a stunning, if controversial, example of Avarice is Bliss.


This house exemplified the entire premise of this blog: Long Beach, while a great city in its own right, pales in comparison to Orange County regarding schools, low crime rates, incomes, and cleanliness, and therefore cannot possibly justify asking prices that match (and in some cases exceed) the premium levied in OC.

However, Kool-Aid knows no bounds and Long Beach sellers (particularly those in less desirable areas of Long Beach) got drunk on Equity Juice and priced homes in less desirable neighborhoods like they would in Irvine, Huntington Beach, or much nicer cities in LA County.

By putting their greed on display, they held themselves out for ridicule and humiliation. Hence, the impetus and inspiration of this blog.

So, here we are today, more than a year after the home was first listed on the MLS at a laughable $454 per square foot. Like many others, the seller gave up and the property has since been taken off the market ("MY HOUSE IS SPECIAL, DAMN IT! IF THESE BUYERS ARE TOO STUPID TO REALIZE THAT, THEN I WILL JUST TAKE IT OFF THE MARKET. I REFUSE TO BE INSULTED!") and now they are attempting to rent it.

ADDRESS: 1533 E. BROADWAY AVE. (BROADWAY/CHERRY)BEAUTIFUL, LUXURY 2BED/2BATH HOUSE FOR RENT! Immaculate Hardwood Floors throughout House. Skylight in Large Living Room. Fireplace located in Living Room. Luxurious Kitchen with Stainless Steel Appliances. 2 Full Bedrooms with AIR CONDITIONING! Large Attic for Storage. Stacked Washer/Dryer. Wiring available for Direct TV and Surround Sound System! Charming, Large Backyard with Firepit and Entertainment Area. Great Location!!1 YEAR LEASEGardener ProvidedNo PetsTenant Pays ALL UTILTIES EXCEPT WATERMUST SEE!!!!

You are welcome to come into our office and pickup keys to view this unit M-F between 9am-4pm. WE ARE NOT OPEN OVER THE WEEKEND. Please feel free to contact me via email or at the office for further questions.

Actually, they've been attempting to rent it for more than a year, offering a "LEASE or LEASE TO OWN!" scheme--ERR, agreement from the get-go. No bites.

But, I thought "this is a NEW HOUSE." Well, if anything from 1918 could be considered new, I guess they're on to something. By the way, I can give you a sweet deal on a "NEW" Nash 681.

They seem a bit thick-headed, no? They refused to lower their asking price to a reasonable figure and the property didn't move. They refused to ask a reasonable rent and it's still vacant after a year.

I'm going to let this seller in on the most closely-guarded secret known to man. This wisdom is guaranteed to save the housing market in one fell swoop, but it has been elusive to all but those who travel in the darkest, most remote corners of the universe. But now I will unleash it upon the world for all to see, so that our housing market and the current misery and financial hell may end once and for all. And here it is:

Lower the price, dick.

You may have read there has been an uptick in sales recently. There is no complicated, macro economics-heavy explanation for this other than prices are cliff-diving. And when people can afford homes without bullshit, negative-amortizing, interest-only, Harry Houdini loans, homes start selling. Real simple, folks.

And if this seller had accepted this truism from the outset, he could have saved himself a year's worth of carrying costs, which at the time I estimated at $3,500 per month ($42,000 in a year!), and a lot of stress. Assuming this termite tent could get $2,000 per month in rent (which, judging by the time it's been sitting unoccupied, is yet another case of this individual's greed-faced lunacy), they are still bleeding cash to the tune of $1,500 per month! OUCH!



Incidentally, the Irvine property I compared this house sold for $540,000 in March. That was only $9,000 off the original asking price. Yikes, for a corner location? How much "equity" do you suppose that buyer has lost since his purchase?

The point is, Irvine can clearly get away with those prices, but our Long Beach seller learned after a year on the market that Alamitos Beach ain't Irvine.

If you'll recall in the original post, a local realtor and an offended resident posted invective comments with absolutely no analysis or data to support their misguided, rose-colored assessment of Long Beach real estate. They instead offered personal attacks and meaningless insults, but couldn't refute my opinion that:

"At $454 per square foot and 260 days on market, this thing isn't going anywhere. Sometimes I get the feeling owners just aren't serious about selling. I don't care how close you are to Belmont Heights, in this zip code the median household income is $30,353. This house is probably slightly above median considering the minor updates, but even if the median income were $50,000 a year, this thing wouldn't be priced more than $250,000."

I mean, it doesn't take Dionne Warwick and her psychic friends to call that one.

The fact is that homes are still overpriced and prices have a way to go before they meet market fundamentals (I'm not talking about the much-vaunted "bottom," I'm just talking about when a home purchase is a sound investment) and as long as banks have a large inventory of REO properties and that tidal wave of Option ARM resets is looming just off the coast, buying a property today is nothing more than a backstage pass to the Financial Agony show at the Wiltern (I heard Slayer is opening).

Inventory Update

That's down 3% just between September and October! Wow.

And the result?

A greed-driven divergence between List vs. Sold price per square foot.

That's what happens when all but the dumbest, most delusional sellers take their ball and go home and wait for the market to "return to normal." Current sellers know there's no quality inventory out there and it makes them cocky and emboldened.

As we enter the winter months we'll see if that approach pays off.

Spanish Why

6915 SEASIDE Walk, Long Beach, CA 90803
Wishing Price: $3,300,000
Beds: 4
Baths: 2.5
Sq. Ft.: 3,498
$/Sq. Ft.: $943
Lot Size: 2,394 Sq. Ft.
Year Built: 2002
Community: Belmont Shore/Park/Naples/Marina Pacific/Bay Harbor
MLS#: P715930
On Redfin: 294 days
Down Payment: $660,000
Income Requirement: $754,000
Monthly Nut: $18,000
Description: Private Spectacular Location, Oceanfront, on the Sand with Awesome Panoramic Views of Catalina Island, Port of Long Beach, Seal Beach, Alamitos Bay and Naples Island. This gorgeous tri-level Mediterranean (2002 new construction) Peninsula home provides effortless waterfront living and entertaining. Dramatic sweeping spiral staircase leads you from the first to the second and third levels wrapping the circular turret. This open and airy floor plan has high ceilings, gorgeous architectural details including barrel ceilings and beautiful arches. Gourmet kitchen with granite counters, Bosch dishwasher, custom cabinetry, over-sized center island, Master Bath has a Hydro-System Whirlpool (78 x 44 x 21, 105 gal) bath. This incredible property must be seen to be appreciated custom paint, hardwood and travertine flooring, custom draperies, lighting and architectural details with absolutely incredible custom-design ceramic tile, large private patio over looks the Pacific Ocean.

I'll never understand sellers like this.

You've been collecting dust on the MLS for a few months shy of a year, yet your listing price has only come down $195,000, or 5.5 percent.

Five point five!

What the fuck are you waiting for, these appliances to come back into style?

Need I remind you that you're asking THREE POINT THREE MILLION DOLLARS?

There's simply no excuse for those old-ass appliances. I realize this place was built in 2002, but I'm reasonably sure stainless steel was popular even back then.

And even if it wasn't, you're asking THREE POINT THREE MILLION DOLLARS!

High-end buyers looking to drop that much loot expect Viking appliances at a minimum.

If the rest of the details and materials were as impressive as your staircase...

...you might be onto something.

But instead we get Mehhh-morial Day:




My dude, you need to get in the game.

By now it's exceedingly obvious that buyers aren't willing to shell out $18,000 in monthly outlays (yes, you read that correctly) for your idea of an "incredible property."

Plus, your Spanish theme is alright, but I think it looks cheesy and inconsistent with a high-end house (and wholly inconsistent with the modern exterior design).



For $943 per square foot(!), buyers are looking for The Four Seasons, not the The #4 at SuperMex.

Furthermore, you purchased in 2001 for a million clams...even after construction costs (which couldn't have been that much -- it's not like you splurged anywhere) you should still have a lot of equity and a nice, comfortable cushion.

Yet here you are, watching your property rot before your very eyes. And your obstinance is even more confounding when you consider the insane number of days you've been begging on the market, news of housing prices not only not recovering but in fact entering a double-dip, and reports of massive government layoffs (what were once thought to be "stable" jobs that home sellers could count on).

I just can't figure out why you're so reluctant to accept reality, lower the price, and get it sold.

Oh:

"Seller/Owner/Principal Real Estate Licensed"

Say no more.

Well, one last thing: Can I just congratulate you in advance on your second year on the market?

Circle of Duh: UPDATE II

Oct 15, 2010 - Price Changed $375,000

After spending the last TWO HUNDRED AND FIFTEEN DAYS stuck on the same ridiculous asking price, just days after my latest post the price dropped by $15,000.

Looks like somebody reads the Long Beach Housing Blog.

Or is it just coincidence?

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Days on Market: 324

I mean, why not just take it off the market? 11 months on the MLS and you've only managed a measly 8% price reduction...from a hilariously WTF asking price, no less.

And that last price cut was seven months ago!

Just give up the ghost, buddy. You're clearly not interested in selling, so pack up your stupid fish-eye lens and quit wasting our time.


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2805 East 3RD St #14, 90814
WTF Price: $425,000
Beds: 2
Baths: 2
Sq. Ft.: 1,000
$/Sq. Ft.: $425 (The highest ppsft in this zip is $314)
Year Built: 1974
MLS#: S596231
Source: SoCalMLS
On Redfin: 30 days
HOA Fine: $263
Down Payment: $15,000 (FHA)
Income Requirement (4x income): $106,000 (FHA would probably be more lenient here)
Monthly Nut: $2,900 (FHA)
Description: Fabulous opportunity! This Belmont Heights condo is completely re-done in the highest quality. This property is turn-key and immediate occupancy is available. Upgrades include: Spectacular walnut kitchen with cove ceiling with recessed lighting, tile flooring, stainless steel stove and dishwasher. Eating area. Crown mouldings and baseboards as well as new doors and casings throughout. Living room has an enclosed balcony, beautiful fireplace and is wired for a flat screen over the mantle. Both bathrooms highly upgraded including granite counter tops. The Master bedroom has new fan with lighting and balcony. A walk in closet and 2 additional closets--no storage issues here! This condo won the 2005 Belmont Beautification Award. This has to be the best value on the market today! Laundry Facilities are down the hall.

I was just going to post this property as a Shitty Realtor Photo of the Day, but I feel like the level of sheer delusion and stupidity warrants a further look.

First of all, shithead, thanks for the one photo of a condo that you claim won the highly prestigious "2005 Belmont Beautification Award" (whatever the holy fuck that is). Do you realize how unbelievably stupid that makes you look?

Not only that, but the photo you included has to be one of the most useless, out-of-focus, diarrhea-brained fuck ups I've ever seen. It looks like you took that shot with a Fothflex dipped in a vat of melted margarine while being tased in the corroded artery.

However, I was able to make out that big, gaping hole where the refrigerator should be. Newsflash, asshole: If I have to go out shopping for a new $1,000 fridge and sit around all Saturday waiting for two sweaty dudes to haul it up to my apartment--THIS PLACE AIN'T FUCKING "TURN-KEY."

And then there's the price. Good lord, man. $425,000?!

For the love of Peter Venkman the tax basis on this thing is only $273,000!

How did you even come up with that number? "How can I convince my therapist that I really am out of my mind"?

The monthly nut on this place, assuming a buyer gets an FHA loan (the FHA's new motto should be: "FHA...where the fuck else you gonna go?") is roughly $2,900. Dude, for a 1,000 square foot apartment that's missing appliances? I'd rather rent on the beach, stay nimble, and save a grand per month while doing it.

Interestingly, the listing information reveals that at one point the price was $390,000 (which is still a crack-smokin' number). Which begs the question, What bong-loaded economic green shoot prompted that $35,000 increase?

The comps certainly can't be what's fueling this greed-soaked idiocy. The only guy in the area asking for this kind of money is 188 Temple ($435,000) and he's too stupid to even include an interior photo.

Other than that moron, the next closest in price is the highly upgraded 315 Winnipeg ($395,000). And despite sporting an extra 200 square feet and a $30,000 discount, he's been rotting on the market since October with no love.

So what chance does our guy at 2805 3rd have?

But that dose of reality still won't deter him nor hundreds of other Long Beach sellers from enjoying their fool's paradise. To their dying breath they will defend their entitlement to massive bubble profits--market realities be damned. And some buyers have been bluffed into believing these prices have some footing in reality! Fools being fooled by fools fooling themselves. Like one continuous circle of Duh.

Sometimes I get the feeling that the return to normalcy and reasonably affordable housing for hardworking people is nothing but a fata morgana, one that gets further away the closer we seem to get.

$805 Per Square Foot in The Heights

4512 East BARKER Way, Long Beach, CA 90814
Wishing Price: $670,000
Beds: 2
Baths: 1
Sq. Ft.: 832
$/Sq. Ft.: $805
Lot Size: 2,400 Sq. Ft.
Year Built: 1924
Community: Belmont Heights/Alamitos Heights
County: Los Angeles
MLS#: P748010
On Redfin: 61 days
Down Payment: $134,000
Income Requirement: $153,000 (3.5x mortgage)/$191,000 (3.5x home price)
Monthly Nut: $3,400
Description (if you can call it that): Stunning Belmont Heights, very private location! This home has never been on the market! This spanish home is very rare.

They're not far off on that "This home has never been on the market" claim. Check out the 2009 tax basis:

Land $22,394
Additions $7,881
Total $30,275
________________
Tax (2009): $542

Holy toledo!

This thing has been in the family for ages. And now the next of kin want to sink their greasy fangs into mee-maw's goldmine. But their greed is preventing them from seeing just how unbelievably outrageous this asking price is.

It's worth noting that not a single property has sold during the last six months for above $635,000 in this area. And that 635k sale was a great looking bungalow in Belmont Shore, sporting 130 extra square feet, a bigger lot, and, well, SOME ACTUAL FUCKING PHOTOS.

What is this listing agent thinking letting a property with such an ambitious (read: absurd) asking price sit on the MLS for 62 days without a single decent picture?

Furthermore, what is this agent thinking letting his clients be the laughing stock of Belmont Heights? I mean, $805 per square foot?

For this shack?!

WTF are you smoking?

The house is on Barker Way, so I thought this quote from Happy Gilmore was appropriate:

"The price is wrong, bitch!"

Believe me, if there is a nationwide foreclosure moratorium and REO and short sale properties (which are a considerable chunk of Southern California supply) are taken off the market, all we'll be left with is greedtards like this.

Try to contain your excitement.

One Foot Out the Door: UPDATE

As I predicted, this deadbeat skipped town and left the bank to deal with the mess.

The bank lent out $560,000 in 2005 for this joint, and is now asking a measly $379,900 -- a nearly $181,000 difference.

Anyway, I imagine the new REO price will entice some buyers.

Or will it?

Unless you've been living in a Chilean mine for the last few weeks (too soon?), you've heard about what some are calling "Foreclosuregate."

From what I understand, banks were wholly ill-prepared for the massive influx of foreclosures starting in 2007 ("Wait a minute. I thought prices only went up and people could 'just refinance' when they had trouble making payments.") and hired any jabroni off the street with a pulse (kind of sounds like their mortgage-issuance strategy too). And under pressure to process this ever-growing pile of foreclosures, these knuckleheads mishandled, fudged, or outright forged a lot of the paperwork.

For some reason the mainstream media is focusing on "illegal" foreclosures, and the prospect that some people were foreclosed on improperly. I assure you, other than a handful of anecdotal examples, THAT NEVER FUCKING HAPPENED.

The overwhelming majority of those being foreclosed on are delinquent and deserve to be kicked the hell out like these self-entitled scumbags (warning, do not read that if you're easily nauseated by victim-mentality deadbeats who expect you to pay their bills). So that's not the issue here.

The issue is: who actually has the right to foreclose?

In a nutshell, the ownership of mortgages (we've all heard of lenders bundling loans and selling them to investors, pension funds, etc.) was tracked electronically by MERS (Mortgage Electronic Registration Systems). So all of that information is there -- don't let anyone blow that out of proportion.

The problem is that in judicial-foreclosure states like Florida, the courts can be quite strict about paperwork requirements and sometimes require more than these electronic records.

Which brings us to title insurance.

Imagine you buy an REO like this one, move in your furniture, and are having a romantic evening with your lady. Luther Vandross, ice cubes in your Rosé, laying on a bear skin rug. You know, romantic.

You're swimming in bliss because in addition to the classy lady at your side, you're no longer a scum-of-the-earth renter, you have in-unit laundry, and the renters downstairs typically turn off their Oakenfold mixes by 1 a.m.

Then there's a knock at the door.

An investment group who bought your mortgage in one of JP Morgan's investment vehicles is claiming ownership of your new abode. Their paperwork shows they are the rightful title owners and this is their apartment.

Then there's another knock at the door.

The deadbeat family who got foreclosed on last year says they were improperly kicked out due to paperwork abnormalities -- completely ignoring the fact they refinanced, bought an Escalade, went to Tahiti, then defaulted on their loan when the going got tough -- and therefore these documentation issues (somehow) prove they are the rightful title owners and this is their apartment.

How excited do you think title insurers are going to be to sort all that shit out in the courts?

Answer: Not very.

Which is why large title insurers such as Old Republic have refused to issue title insurance on any property owned by GMAC or JP Morgan Chase, due to the difficulty establishing who actually owns the right to foreclose.

How many of you bought or plan to buy a home without title insurance?

Exactly.

What an unholy mess.

++++++++++++++++++++++++++++++



Address: 4649 E 4th St. #16, 90814
Asking Price: $449,000
Year Built: 1985
Size: 2 beds, 2 baths, 1,401 sq. ft.
$/Sq. Ft.: $320
HOA Fee: $390 (!)
Purchase price: $560,000
Purchase date: 10/2005
MLS#: P683862
On Redfin: 10 days
Down Payment: $90,000
Monthly Payment: $2,700
Income Requirement: $128,000
Description: This 2 bedroom & 2 bath gorgeous condo is a must see. Turn key pride of ownership. Foyer entry, to gorgeous distressed wood floors throughout. The entire home has been remodeled with exquisite taste. Chandeliers throughout the home. Mahogany fireplace. New Kenmore appliances. In wall safe. Tumble marble flooring in bedroom and bathroom.

Yeah, but does it have a chandelier above the toilet like this guy? I didn’t think so.

Er, well, actually, close enough:


And what's up with the sink in this (cluttered, messy) bathroom? Is that another toilet?



It looks like the Stay Puft Marshmallow Man's hemorrhoid pillow:



The most significant aspect of this apartment is the 2002 sales price. $291,000 ($208 per square) seems like a pretty good deal considering the bubble had already been picking up steam by '02. But what the holy hell was our current seller thinking when he determined paying $560,000 just three years later made good financial sense?

20% annual appreciation seemed “normal” to you? Really? Hell, Bernie Madoff couldn't even hit those numbers.

And speaking of bloodsucking leeches, check out these creepy drawer pulls:

Is it just me, or do these bathroom cabinets look like the cheap-o 1985 originals with a half-assed paint job?

Anyhow, I still find it amusing when people compare current asking prices to peak-o-the-bubble prices and conclude it must be a "good deal” because it’s “X% off.”

What they don’t consider is what the property sold for pre-bubble. When we finally hit the bottom, most properties will have fallen (at least) to their pre-bubble prices and considering how much “equity” has been wiped off the face of the planet in such a short amount of time due to this unprecedented, now undeniable housing bubble, people need to use pre-bubble prices as the pricing starting point. Moving backwards from an artificial, reality-defying, Ponzi-scheme-derived sales price to determine "value" is as useless as a kickstand on a tricycle.

This condo is a perfect example. The current asking price of $449,000 is “20% off” the 2005 price of $560,000.

“Wow! What a steal!”

BUT, today’s price is an astounding 54% ABOVE the 2002 price (which isn’t even a “pre-bubble” price--it's two full years into the bubble). Considering most Long Beach condos are selling for 2003 prices and headed lower, is this still a “smokin’ deal?”

It’s all about perspective.




As you can clearly see, this individual picked a REALLY bad time to buy, and an even worse time to sell. If this seller can find a sucker to pay the current asking price of $449,000, the loss to the loanowner will be $137,000--not including the costs of upgrades.

If we’re nice and estimate the seller spent $40,000 on “distressed” (just like the seller!) wood floors and other upgrades (which will be fortunate to fetch $0.50 on the dollar in this highly-competitive, post-“Flip This House” environment), the seller will face a catastrophic loss of nearly $160,000.

Wow, that’s about $40,000 in depreciation for every year of ownership!

But it gets worse. That's because this place has ZERO chance of selling for $449,000. Sure, this large apartment is nicely appointed (bathroom cabinets notwithstanding) and has every amenity you could ever need (pool, inside laundry, two secure parking spots. etc.) but the days of half-a-million-dollar non-beachfront condos are dead like personal responsibility.

Some might point out that the price per square foot isn’t that crazy compared to the neighbors, but the point is the neighbors aren’t selling either!

I think this seller could find a knife catcher if they slashed $65,000 from the demand tonight. They don’t know it yet, but if they accepted $385,000 right now it would be the best thing that ever happened to them. My prediction is they’ll reject such “lowball” “scavenger” offers throughout the year only to discover in winter that the market has completely passed them by. Only then will they realize that $385,000 would have been a phenomenal deal.

But they can't go down to $385,000. Because although they might have enough equity to absorb a $160,000 loss (keep in mind this is not a short sale!), a $225,000 loss is a completely different animal. Which means this will eventually become a short sale.

And given the ever-growing volume of distressed properties lenders must contend with, the bank probably won’t be able to act quickly enough to prevent this from going into foreclosure.

Hell, some of the photos make me think the seller already has one foot out the door:

Gold records stacked neatly along the wall...


Crap in boxes (lit beautifully by that chandelier, by the way) ready to go...


It appears as if they're already waving the white flag. And with a ~$3,400 monthly payment, it's not difficult to see why.

The good news is, once wannabes like this are purged from the market and Long Beach real estate values return to some semblance of reality, you and I will be able to snag swanky little apartments like this for reasonable, affordable prices.

Be patient. We'll get there.