Greek Pillars = "Amazing Architectural Detail": FINAL UPDATE

7/28/2006: Purchased $770,000

1/25/2010: Sold $610,000

So, factoring in commissions the seller lost nearly -$200,000. And he also pumped a lot of cash into upgrades, meaning he lost a veritable truckload of his own dough in this transaction. But, I'm glad that he's finally free from his poor decision and avoided Short Sell Hell!

To the new owner, congratulations and enjoy that awesome view (and that kitchen resembling a Smurf's diaper)!

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



25 15th Pl #804, 90802
Price: $579,995
Beds: 3
Baths: 2
Sq. Ft.: 1,310
$/Sq. Ft.: $443
HOA: $407.40
Year Built: 1989
MLS#: P697199
On Redfin: 8 days
Down Payment: $116,000
Monthly Payment: $3,500
Income Requirement: $166,000
Description: The pride of Long Beach! Featuring astounding beach and ocean views, a gorgeous interior, and an impeccable presentation, this is a paradise for anyone that has ever dreamed of a peaceful and wonderful getaway for their home. It is impossible to not fall in love with this gem of a property! This 3-bed, 2-bath penthouse condo is located in a very secure, ocean-front building with direct beach access. You will enjoy breathtaking beach/ocean views from the enormous patio. Inside, amazing architectural details such as crown molding, indirect lighting, vaulted ceilings, gorgeous hardwood floors, pillars, stainless steel appliances, & a fully renovated kitchen will astound you. You'll never know how you lived before without a fireplace, walk-in closet, wet-bar, and even a wine fridge. Don't forget access to the nearby pool, jacuzzi, business center, and gym amenities, and a location moments from Long Beach's best spots (2nd street, Pine Ave, Downtown, and more). Welcome to your dream home!

What an enthusiastic listing description! Superfantasticdonchaknow!

I hate to break it to you, but anyone making the required $166,000 per year is probably familiar with fireplaces, closets, and mini wine fridges. Just a guess. I mean, is a rickity wet-bar the new tennis court?

This spacious apartment, in a killer beachfront location, is loaded to the gills with goodies (although some are of questionable taste). Someone obviously put a lot of dough into sprucing up this penthouse.

You can't really get a handle on the size of that balcony, but it looks pretty damn big. All the better to enjoy those ocean views.

You want to see something weird (yet kind of awesome)? I started writing this entry a few days ago, and since then the realtor took some new, better photos--including this one of the balcony on a sunny day:

Hey man, I give credit where credit is due--that was a smart move.

Unfortunately, there are a lot of useless photos as well:



Sadly, no amount of photography do-overs can fix that monstrosity of a kitchen. Yuck.

Dude, Smurfette's gonna be pissed you bit her style.

Here's how I imagine the cabinet selection process went:

"So, Mrs. Gerard, what kind of cabinets are you looking for exactly?"

"Show me the most hideous fucking things you've got."

"Uh, well, Snap-On just started producing cabinets that resemble toolboxes..."

"You had me at hello."

Anyhow, if you're cool with the decor, this classy joint can all be yours for a 2003 price of $579,995. Oddly, despite the fact that this seller paid $770,000(!) at the peak in 2006, this is not (yet) a short sale.

That means the seller put down at least $225,000. Because that is the amount it will take to cover the mortgage and selling costs and walk away clean without credit score anihilation. Considering the '06 purchase date, it's not hard to imagine bubble profits from another property sale serving as a large DP, explaining the equity sale status.

Keep in mind, that massive -$225,000 loss is predicated upon actually selling at this price. Maybe it will, maybe it won't. But even if it does, for the seller that must be a tough pillar to swallow.

The Only Certainties in Life: UPDATE II

The price was "$875,000" and changed to "$825,000"

Now we're getting somewhere!

P.S. We're at 84 DOM, and the illiterate realtor still hasn't fixed the "Elementry" typo. Great work, champ!

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

The price was "$899,000" and changed to "$875,000"

Hey, at least he's under $600 per square foot now!

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

I've been traveling more than George Clooney's character in Up in the Air. Savannah was pretty cool and Austin was a blast as always.

Anyhow, I'm back and have been checking out this bungalow LBCee sent in:
ADDRESS: 5266 East APPIAN Way, 90803
ASKING PRICE: $899,000
BEDS: 3
BATHS: 2.75
SQ. FT.: 1,471
$/SQ. FT.: $611
LOT SIZE: 5,000 Sq. Ft.
YEAR BUILT: 1940
MLS#: P709784
ON REDFIN: 35 days
DOWN PAYMENT: $179,800
INCOME REQUIREMENT: (4x income): $225,000
MONTHLY NUT: $4,900
DESCRIPTION: Charming Belmont Park cottage style home. Included in sq. ftge. is detached guest quarters with 3/4 bathroom. Living room has brick fireplace. Dining room opens to kitchen and living room. Upgraded electrical and plumbing, forced air heat, A/C, hardwood floors throughout, plantation shutters, skylights, crown moldings. Spacious grassy backyard. Oversized 2-car garage. Walking distance to award winning Lowell Elementry, Rogers Middle School, Alamitos Bay and Marine Stadium.

How awesome is it that they misspelled “Elementry”? HAHAHAHAHAHA.

As the listing description notes, the 1,471 square feet also includes detached guest quarters. Translation: The main house, where you are going to live, is as cramped as a Hong Kong cemetery.

And some of these photos highlight just how tight things are:
Is that even a Queen bed? I would guess the primary residence is sub-1,000 squares. As LBCee said, “I’ve had closets bigger than the bedrooms in this house.”

But, as we all know, people are enthusiastically willing to give up personal space if it means living in prime areas of Long Beach. And they’re more than glad to pay a substantial premium to get there. So let’s not lose sight of just how awesome this location is—just 300 feet from Marine Stadium. It ain’t beachfront, but this neighborhood is D-E-S-I-R-A-B-L-E.

H-O-W-E-V-E-R, the underlying desire of buyers to get into this nabe is often grossly overestimated by sellers, and we get what we have here today: Yet another delusional Long Beach seller who thinks he’s special and immune to the realities of the current market.

With a $611 per square foot asking price, this turd burglar is blatantly insulting potential buyers. Conversely, the batshit-insane $899,000 price tag makes nearby sellers very happy because their larger spreads look positively cheap by comparison.

To make matters worse, this overpriced wonder isn’t even that impressive. Sure, it’s ultra clean and sports some upgrades, but scope these photos and tell me with a straight face that you’re looking at a NINE HUNDRED THOUSAND DOLLAR HOUSE.
Really? That justifies being the most expensive listing in the neighborhood?

The only certainties in life are Death, Taxes…and this cocky asshole reducing his price.

As LBCee pointed out, “You'd have to knock $250k right off the top of this listing price to get to around $500/sq.ft." That's the average price per square of listed homes in this area. And considering he paid $780,000 for this 69-year-old saltine box in early 2005, the lowest he can really go (taking commissions and upgrade money spent into account) is roughly $840,000 without taking a loss. There's no way that will get the job done.

Newsflash, you time-wasting fool: If you want to sell, your billfold will take a massive hit. End of story. So start pricing realistically and get it over with.

But I'll tell you one thing: If this place sells for $899,000 I hereby declare RE in the LBC over and done with. I will close up shop immediately. There would simply be no point documenting Long Beach real estate anymore because if someone is dumb enough to drop nearly a million bones on this average-looking sardine can, it means the world has gone completely fucking mad and it’s only a matter of minutes before water jugs and ammo rounds are the new must-have status symbols.

Another Day, Another Dollar: UPDATE II

January 27: The price was "$344,999" and changed to "$344,888"

Wheeeeeeeeeeeeeeeeeeeeeeeee! This is fun!

P.S. I've decided that I REALLY like this place. I would be willing to make an (incredibly low-ball) offer...if they were smart enough to accept financed bidders. Oh well.

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

January 22: The price was "$356,000" and changed to "$344,999"

Wow, are they finally getting serious?

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

January 18: The price was "$356,001" and changed to "$356,000"

LOL!

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


700 East OCEAN Br #2102, 90802
Asking Price: $356,002
Purchase Price: $518,000
Purchase Date: 6/2007 (right at the peak, ouch.)
Beds: 2
Baths: 2
Sq. Ft.: 1,080
$/Sq. Ft.: $330
View: City
Year Built: 1965
MLS#: Y904098
On Redfin: 137 days
HOA: $638
Down Payment: $356,002
Monthly Nut: $638
Description: THIS IS A CASH ONLY DEAL!! Property is corporate owned, we respond to offers right away. Take a look at the inside, this is chic to say the least and is perfect for somebody who just wants to move in right away. Sellers [SIC] loss, your clients [SIC] gain.

"THIS IS A CASH ONLY DEAL!!" LOL. Way to expand your buyer pool, idiot. Smart move catering only to buyers with hundreds of thousands of dollars just sitting around in coffee cans. Because we all know their numbers are growing by leaps and bounds.

Such a shame too because if they opened themselves up to a financed sale, I would definitely be interested in a clean, modern-looking condo like this. I've got the down payment and reserves, but I guess they're just not interested in selling to me. Too bad.

And just when you thought their sales strategy couldn't get any dumber, we get this:

Jan 06, 2010 - Price Changed $356,002
Dec 22, 2009 - Price Changed $356,001
Dec 07, 2009 - Price Changed $356,000

If you're going to be such a petulant moron and dick around with piss-ant $1.00 price changes, at least make them price reductions.

Hell, even the dumbest, most oblivious all-caps, mouth-breathing realtards know that "$355,999" is more psychologically appealing to buyers than "$356,000."

Given the complete lack of common sense involved here, I want to find out who the corporate owner is so I can avoid ever working for a company so obviously run by slack-jawed imbeciles.

Here is the listing history in full detail to illustrate not only the anatomy of a bubble, but the amount of financial pain in store for the seller:

Jan 06, 2010 - Price Changed $356,002
Dec 22, 2009 - Price Changed $356,001
Dec 07, 2009 - Price Changed $356,000
Nov 09, 2009 - Relisted
Oct 23, 2009 - Delisted
Aug 23, 2009 - Listed $399,000
Jul 03, 2008 - Delisted
Jul 03, 2008 - Relisted
Jun 18, 2008 - Delisted
Jun 18, 2008 - Relisted
Jun 04, 2008 - Delisted
Jun 04, 2008 - Relisted
May 21, 2008 - Delisted
Apr 03, 2008 - Listed
Jun 11, 2007 - Sold (Public Records) $518,000
May 12, 2007 - Delisted
Apr 25, 2007 - Delisted
Apr 14, 2007 - Price Changed
Apr 14, 2007 - Price Changed
Mar 10, 2007 - Price Changed
Mar 07, 2007 - Price Changed
Feb 14, 2007 - Price Changed
Feb 13, 2007 - Price Changed
Jan 29, 2007 - Listed
Jan 04, 2007 - Listed
Oct 29, 2004 - Sold (Public Records) $519,000 (27.1%/yr)
Apr 17, 2003 - Sold (Public Records) $359,000 (81.1%/yr)
Nov 26, 2002 - Sold (Public Records) $285,000 (11.2%/yr)
Jun 02, 1995 - Sold (Public Records) $129,000

In 1995, near the bottom of the last housing downturn, this place went for only $129,000. Freaking amazing. The PITI was barely more than the HOA payment! Anyhow, that 1995 owner doubled his money in just seven years and thus began a frenzy of quick flips and bubble exuberance.

Interestingly, the 2004 owner paid $519,000, but was unable to capitalize on three years of appreciation during the greatest housing bubble in history, and sold to the corporation in 2007 for $1,000 less than he paid (hopefully that transaction was the company bailing out one of its executives). Good one.

The corporate owners tried to unload less than a year after purchasing but ended up without a place for their misguided keisters in the game of Real Estate Musical Chairs. By 2008, all of the party guests had gone home and there was no one left to save them.

The loss on this apartment, assuming some fool with more stacks of cash than brain cells buys for full asking price, will be -$180,000 plus upgrade costs (which don't look cheap).

So here we are, after nearly two years on the market, farting around with one-buck price increases while the highly sought-after all-cash market gets smaller and smaller.

Not to mention, this is a less-desirable city view apartment. Why shell out all that money with no ocean view, I can hear the cash-flush buyers asking. Worse, this unit is being undercut by other city view apartments in the building:

$329,000
700 East OCEAN Ave #1102
2 bd / 1.75 ba
1,080 Sq. Ft.

$329,000
700 East OCEAN Blvd #2402
2 bd / 2 ba
1,080 Sq. Ft.

$279,000
700 East OCEAN Blvd #1902
2 bd / 1.75 ba
1,080 Sq. Ft.

Yes, they are short sales so the prices don't mean much until something closes, but just for one minute let's set aside the problems with short sales pricing (and the SS process itself) and assume you could buy one for $329,000. Your monthly payment with 20% down would be roughly $2,300--including that rapetastic $638 HOA fine. Rents for ocean-facing units are ~$2,000. The Rent vs. Buy ratio is getting awfully close for these units, meaning $329,000 seems like a decent price in the current market.

Which in turn means our seller isn't that far off.

The issue here is the myopic decision to narrow potential buyers to only those who have cash in-hand. It's seller suicide.

Why not just restrict your buyer pool to redheaded ambidextrous French-Canadian bird collectors?

In the meantime, we're looking forward to your next $1.00 price increase!

Walking Away Getting More Ink

By way of Calculated Risk, Diana Olick's latest article on Strategic Defaults:

The lead story in commercial real estate today is the dynamic duo of Tishman Speyer and BlackRock walking away from Stuyvesant Town and Peter Cooper Village in Manhattan. The two have been trying to refi $4.4 billion in debt on the 11,200-apartment property, to no avail. So now they're handing over the keys to the lenders.

The joint venture bought the property at the height of the market for $5.4 billion. Now, thanks to falling values in commercial and residential real estate, it's worth about $2 billion.

Here's the quote from the venture: "The only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives." [That's a nice way of saying: WALK THE HELL AWAY]

This news comes on the heels of Morgan Stanley walking away from its commercial mortgage commitments on five buildings out in San Francisco.

Apparently it's just good business.

So why is it not just good business for homeowners to walk away from their mortgages? Borrowers are looking at the same negative equity and loss on investment, simply on a smaller scale. At least that's the running argument. Somehow it's fine for commercial investors, but not for individuals?

...

Some folks argue that home mortgage walkaways are destroying the housing market by pushing up the number of foreclosures, which in turn drive down the value of the homes around them. I'm sure the same argument can be made in the commercial real estate market. Massive defaults only push commercial values down further and in turn make it even harder for the next investor to get credit.

Oh, but that's just a company and a building, not a person, right?

Well, think about the other investors in that commercial property. One of the big investors in Stuyvesant Town and Peter Cooper Village is the California Public Employees Retirement System.

They, I believe, hold an awful lot of regular folks' retirements.

Actual people.

I Want My Eh-Quit-Tee...

2601 East OCEAN Blvd #605, 90803
Asking Price: $529,000
Purchase Price: $338,000
Beds: 3
Baths: 2
Sq. Ft.: 1,484
$/Sq. Ft.: $356
Year Built: 1973
MLS#: P711189
On Redfin: 71 days
HOA: $566
Income Requirement: $132,250
Down Payment: $105,800
Monthly Nut: $3,300
Description: Highly sought after corner, panoramic ocean and city view unit in the newly remodeled, elegant and oceanfront security building, the 'Versailles', located in the estate section of Bluff Park. Stunning ocean white water views of the shoreline, Queen Mary & Catalina. Not to mention amazing 270 degree plus views back to Downtown LA and the Mountains as well from your floor to ceiling windows in every room! Three bedrooms and 2 balconies make for a great open floor plan with views everywhere you look and terrific ocean breezes!This home is priced aggressively and is a rare find not to be missed!Terrific location steps to Bike Path, beach & Art Museum. Small pet ok.

Just like yesterday's realtor, this guy failed to provide any interior photos. Even more idiotic, this photo appears to have been taken from inside the unit!

How hard is it to turn the camera around?!

What are these morons thinking? But maybe instead of asking what they're thinking, we should be asking what they're afraid of.

Because the lack of photos, combined with the conspicuous lack of interior features mentioned in the description, leaves us with only one reasonable conclusion: This place is a friggin' dump.

And dude, this building is "newly remodeled"?

Really?

Because I just pulled up in my Testarossa, and after turning down the volume on my Live Aid cassette I tugged down on my Oakley Frogskins and caught a glimpse of this lobby:

My Hypercolor shirt turned bright green when I saw it, leading me to believe this place hasn't been remodeled for at least a quarter century.

What say you, Crockett?

"LOOK OUT, TUBBS! IT'S A TOTAL PIECE OF CRAP!"

The exterior photo isn't helping the cause either:

Looks like the update needs an update.

Furthermore, the listing agent, who has ably demonstrated he's really good at this whole home selling thing also claims, "This home is priced aggressively."

Really? Because I have 71 reasons to believe that's total horseshit.

That is, 71 days on market. You're quickly approaching the scarlet number of 90 DOM, meaning without a price reduction your listing is about to go stale and lifeless.

And how stoked do suppose he is about the potential comp killer just one floor down?

$350,000?! That's a great deal! I realize it has one fewer bedroom and 480 fewer square feet, but like our featured seller he has an ocean view, two garage spots, and an HOA fine $201 cheaper.

Okay, okay, fine--it's a short sale [Side note: this rube first put his apartment on the market in 2005. Yikes! Other than a brief sojourn in 2006, he's been begging ever since. And because of his 1,200 days of stubbornness, greed, and ignorance of reality, he watched his pre-bubble purchase go from a potentially profitable transaction to a credit-pummeling short sale. What an idiot. He also hired a listing agent dumb enough to believe excluding interior photos is a wise marketing plan. What is with these realtors?] so "that price doesn't count."

So let's look at sold comps for a little more insight:

$465,000
2601 E Ocean Blvd #709
Sold on Dec 08, 2009
2 bd / 2 ba
1,004 Sq. Ft.

$455,000
2601 East OCEAN Blvd #803
Sold on Sep 29, 2009
2 bd / 2 ba
1,028 Sq. Ft.

Yes, these units are smaller, but both are on higher floors and sport ocean views. And remarkably, they are at least $74,000 cheaper (and believe me, seller, you don't want to know what units are going for in nearby buildings. You'll cry like a febrile baby).

But, as is the case with most pre-bubble, equity-rich Long Beach owners, today's seller is trying to grab as much bubble cash as possible--lack of demand be damned. Considering he purchased in October 2000 for $338,000, I kind of get where he's coming from. After all, he played his cards right (or got lucky depending on how you look at it) and should definitely try to cash in on that windfall.

In this case, a windfall of $161,000 (assuming he finds a buyer for that tired-ass $529,000 asking price). Plus, considering he paid down the note for nearly ten years and didn't put any money into upgrades (the listing description and lack of photos are a dead giveaway), if we assume he didn't HELOC the crap out of this place he's in a really good position.

Except he's letting his greed get in the way of a bubble-profit gravy train. If he truly "priced aggressively," he might be pleasantly surprised by the reaction and sell this thing in no time.

What say you, "Money For Nothing" dude?

"SCREW THAT! I WANT MY EH-QUI-TEE!"

Speaking of money for nothing, after nearly three months on the market you'd think the realtor would advise his client to throw in at least one price reduction. I mean, the message from the market has been pretty loud and clear: DROP. THE. PRICE.

But, just like Monday's seller, this guy and his agent are betting the government incentives will last forever, prices won't drop any further, unemployment will rebound soon, FHA will continue to loan recklessly, and interest rates will stay this low for eternity.

That's an awfully risky roll of the dice. And a helluva lot of equity and bubble profit is on the pass line.

Toweer of Babel

1728 East 3RD St #3, 90802
Asking Price: $289,000
Purchase Price: $132,500 (10/1999)
Beds: 2
Baths: 1
Sq. Ft.: 910
$/Sq. Ft.: $318
Year Built: 1928
MLS#: P703419
On Redfin: 130 days
Income Requirement: $72,250
Down Payment: $10,115 (FHA)
Monthly Nut: $2,000 (yikes!)
Description: WOW!!! This fabulous historical Rose Toweers condo is three blocks from beach, trendy shops and dining and public transportation. This unit is downstairs and has wonderful hardwood floors, faux fireplace in living room, faces courtyard, has dining area in living room and kitchen and has great choice of colors throughout. The complex falls under the Mills Act because it is historical and is on the National Registry of Historical buildings. WOW. Just a beautiful and charming place. This is not a short sale or REO property

WOW!!! How the hell do you misspell "Towers"?

And I love this...

Property Features:
Window Bars

Bonus!

I really like the look of this complex. I can't explain it. It just looks to tranquil. Like a Mediterranean getaway.

But, you know, pink.

Which is why after reading that lush description I was excited to scope some photos. But, alas, this agent believes mystery is the best policy.

"has wonderful hardwood floors"? PROVE IT.

"faux fireplace in living room"? PROVE IT.

"faces courtyard"? PROVE IT.

"has dining area in living room and kitchen"? PROVE IT.

"and has great choice of colors throughout"? PROVE IT.

And since there are no interior photos, I'll cut right to the chase: today's featured seller, obviously emboldened by their strong equity position, has been leisurely chasing the market down for quite some time.

And by "quite some time," I mean SITTING ON THE MARKET SINCE TWO THOUSAND FREAKING FIVE!

Jan 19, 2010 - Price Changed $289,000
Nov 29, 2009 - Price Changed $297,000
Oct 19, 2009 - Price Changed $317,000
Sep 15, 2009 - Listed $329,000
Sep 21, 2008 - Delisted
Feb 06, 2008 - Listed
Feb 02, 2008 - Delisted
Aug 28, 2007 - Listed
May 05, 2006 - Delisted
Nov 04, 2005 - Listed
Oct 13, 1999 - Sold $132,500

That's right. Pretty much four years on the market! That has to be a record for the Long Beach Housing Blog.

Despite the eternity trying to sell for whatever chronic-fuelled figure was floating around in their delusional head, you do have to give the seller credit for finally getting serious late last year. Since September, the price has been slashed by $40,000.

However, reducing the price when you start out at a hilariously WTF number is like patting yourself on the back for quitting cocaine and heroin cold turkey...only to pick up a meth habit.

Considering this seller purchased pre-bubble for a pittance ($132,500), I understand how the allure of doubling your initial investment could cloud your vision and keep you from pricing too aggressively. I mean, you want to get your mitts on as much bubble profit as you can, right?

Unfortunately, that greed is preventing the seller from accepting the truth about today's market. Even with artificially limited inventory and fast-money subprime FHA loans, most overpriced properties just sit.

Especially pieces of crap. Which, let's be honest, this most likely is. I mean, how else can you explain the lack of interior photos? No realtor would be that terminally stupid to try to sell something for nearly $300,000 without a few pictures, right?

Honestly, I have no idea what this dolt is waiting for. Slash the price and get this thing sold, dummy! Anything you walk away with is pure, unearned bubble gravy anyway--why hang around for another year trying to get a few extra nickles?

Plus, this ground-floor unit doesn't seem very desirable. It has no stove, only one garage spot, two shared walls, and no laundry on the premises (sweet, two grand a month for the privilege of hanging out in a laundromat every Saturday). Take the money while this thing is still worth more than $200,000!

Look, rates won't be this low forever, the FHA won't stay solvent forever, first-time homebuyer ponies (likely) won't make it past summer, inventory won't remain this artificially low forever (well, actually, they might be able to drag it out for years, but are you willing to take that risk?)...WHAT THE HOLY HELL ARE YOU WAITING FOR?!

This may not be the ideal time to buy, but with all of the government incentives aligned just so, I can't imagine a more opportune time for the equity-flush to sell.

U.S. Consumer Debt

Via The Big Picture Blog:

Saint Stupid: UPDATE

The price was "$875,000" and changed to "$850,000"

I have to give him credit for consistently lowering the price, but I've got bad news: on the very same day as his $25,000 price reduction, his (waaaaaaaaaaaaaaay nicer) competition on Monrovia lowered his ask to $835,000 (FYI, that's down from $1,055,000 in July 2009. He's been reducing the price every week since).

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

I apologize for the recent focus on 90803 bungalows, but these nitwits and their delusional senses of entitlement have to be called out.

Address: 222 SAINT JOSEPH Ave, 90803

Asking Price: $875,000
Beds: 2
Baths: 2
Sq. Ft.: 1,600
$/Sq. Ft.: $547
Lot Size: 4,050 Sq. Ft.
Year Built: 1937
MLS#: P694685
Source: SoCalMLS
On Redfin: 157 days
Down Payment: $175,000
Income Requirement: $220,000
Monthly Nut: $4,800
Description: BACK ON THE MARKET!!! Will consider trade for a duplex with a yard. Restored, enlarged Belmont Shore showplace home on a larger lot. 2 bedrooms / 2 bathrooms plus office and den. Gorgeous landscaping with waterfall and pond - featured in Long Beach magazine. Spa. Newewr bathrooms and kitchen. Shower / steam room. Double garage behind available. Forced air heating & cooling, tankless water heater. Fireplace in living room. Crown molding & hardwood floors. Granite kitchen tile and bathroom floors and counter top.

"Will consider trade for a duplex with a yard." Hey fuckwit, for $875,000 I and every other potential buyer want a duplex with a yard too. THAT'S WHY YOUR SHIT HASN'T SOLD IN FIVE MONTHS.

What an idiot.

And speaking of idiocy..."Newewr"?

Really? In a listing demanding nearly a million bones?

Or how about "Restored, enlarged Belmont Shore showplace home." Dude, we're talking about 1,600 square feet. How "enlarged" can it be?

[Speaking of enlargement, you want to know why those boner pill companies are allowed to exist despite being completely full of it (come on, think about it. If that shit worked, they wouldn't possibly be able to produce enough of it. Every single solitary dude on the planet would be ordering cases of the stuff. Bottles would be bursting out of glove boxes and briefcases across the globe. This would become a world of men walking around with tree trunks stuffed into their trousers. Hell, we'd all need motherfuckin' motorized scooters to get around)? Because they vaguely claim that they make you "bigger" and "firmer." But they specifically avoid saying bigger and firmer than what. If we're talking about making you bigger than you were after a few laps in a cold pool, sure. Mission accomplished. But bigger than usual while "in the moment?" They craftily decline to say. And how do you know it wasn't rolling around with your partner that made you "bigger"? You don't. So although there is no way to prove the pill made you "bigger," (more importantly) there is no way to prove it didn't--and therefore the ads were not misleading. Plus, who would be crazy enough to file the first lawsuit bitching that the magic beans he ordered from the interwebs failed to make his (obviously) tiny junk into an unwieldly, Incredible Hulk-sized axe handle? Ta-daaaaa!]

Back to our regularly scheduled thrashing. This dude claims his joint is a "showplace."

Uh, okay. Whatever you say.

And just what does "Double garage behind available" mean? Does it cost extra or something?

With marketing acumen like this, it's no wonder buyers have been straight up ignoring your property since March. That's right. The house has been on the market since Q109 but after just 41 days the seller took their ball and went home when nobody would pay their Wishing Price.

In July the beggar--ERRRR...seller proudly proclaimed, it's "BACK ON THE MARKET!!!", naturally expecting people to give a shit. And it's been rotting ever since with zero buyer interest despite two $50,000 price cuts (both in October, 15 days apart).

Oct 23, 2009 - Price Changed $875,000
Oct 08, 2009 - Price Changed $925,000
Jul 10, 2009 - Listed $975,000
May 07, 2009 - Delisted
Mar 27, 2009 - Listed

Unfortunately, this delusual Long Beach seller lost his discounting momentum just when it seemed like he was starting to understand how this market works.

Sure, this thing in the Shore, but so what?

How are you going to compete with sellers like this property, on the beach side of 2nd Street? It sports two extra bedrooms, a bonus bathroom, 216 additional square feet and, other than some horrendous wallpaper that reminds me of the end result the last time I drank Jagermeister, is far superior in the looks department (and, well, every other department too).

Answer: You're not going to compete.

Not with your kitchen, anyway:

Woof.

Or how are you going to compete with this cozy nearby property? I have a feeling buyers would be far more willing to pay an extra five grand for an extra bedroom and 200 additional square feet. Just a hunch.

Oh, but this guy has something over all those other properties. As the listing description so thoughtfully and eloquently puts it: "Spa."

Yikes. All I want for Christmas is a staph infection.

Look, cash-flush people (yes, they still exist--despite what the doom and gloomers proclaim, plenty of people are still employed and have cash stockpiles from waiting on the sidelines for years) are going to continue to severely overpay for 90803 properties. That's just the reality of people with more money than brains (or patience). Case in point.

But unless the glory days of 8x income loans and credit cards for housecats return, I just don't see how 222 St. Joseph sells for $875,000.

Another Day, Another Dollar: UPDATE

January 18: The price was "$356,001" and changed to "$356,000"

LOL!

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


700 East OCEAN Br #2102, 90802
Asking Price: $356,002
Purchase Price: $518,000
Purchase Date: 6/2007 (right at the peak, ouch.)
Beds: 2
Baths: 2
Sq. Ft.: 1,080
$/Sq. Ft.: $330
View: City
Year Built: 1965
MLS#: Y904098
On Redfin: 137 days
HOA: $638
Down Payment: $356,002
Monthly Nut: $638
Description: THIS IS A CASH ONLY DEAL!! Property is corporate owned, we respond to offers right away. Take a look at the inside, this is chic to say the least and is perfect for somebody who just wants to move in right away. Sellers [SIC] loss, your clients [SIC] gain.

"THIS IS A CASH ONLY DEAL!!" LOL. Way to expand your buyer pool, idiot. Smart move catering only to buyers with hundreds of thousands of dollars just sitting around in coffee cans. Because we all know their numbers are growing by leaps and bounds.

Such a shame too because if they opened themselves up to a financed sale, I would definitely be interested in a clean, modern-looking condo like this. I've got the down payment and reserves, but I guess they're just not interested in selling to me. Too bad.

And just when you thought their sales strategy couldn't get any dumber, we get this:

Jan 06, 2010 - Price Changed $356,002
Dec 22, 2009 - Price Changed $356,001
Dec 07, 2009 - Price Changed $356,000

If you're going to be such a petulant moron and dick around with piss-ant $1.00 price changes, at least make them price reductions.

Hell, even the dumbest, most oblivious all-caps, mouth-breathing realtards know that "$355,999" is more psychologically appealing to buyers than "$356,000."

Given the complete lack of common sense involved here, I want to find out who the corporate owner is so I can avoid ever working for a company so obviously run by slack-jawed imbeciles.

Here is the listing history in full detail to illustrate not only the anatomy of a bubble, but the amount of financial pain in store for the seller:

Jan 06, 2010 - Price Changed $356,002
Dec 22, 2009 - Price Changed $356,001
Dec 07, 2009 - Price Changed $356,000
Nov 09, 2009 - Relisted
Oct 23, 2009 - Delisted
Aug 23, 2009 - Listed $399,000
Jul 03, 2008 - Delisted
Jul 03, 2008 - Relisted
Jun 18, 2008 - Delisted
Jun 18, 2008 - Relisted
Jun 04, 2008 - Delisted
Jun 04, 2008 - Relisted
May 21, 2008 - Delisted
Apr 03, 2008 - Listed
Jun 11, 2007 - Sold (Public Records) $518,000
May 12, 2007 - Delisted
Apr 25, 2007 - Delisted
Apr 14, 2007 - Price Changed
Apr 14, 2007 - Price Changed
Mar 10, 2007 - Price Changed
Mar 07, 2007 - Price Changed
Feb 14, 2007 - Price Changed
Feb 13, 2007 - Price Changed
Jan 29, 2007 - Listed
Jan 04, 2007 - Listed
Oct 29, 2004 - Sold (Public Records) $519,000 (27.1%/yr)
Apr 17, 2003 - Sold (Public Records) $359,000 (81.1%/yr)
Nov 26, 2002 - Sold (Public Records) $285,000 (11.2%/yr)
Jun 02, 1995 - Sold (Public Records) $129,000

In 1995, near the bottom of the last housing downturn, this place went for only $129,000. Freaking amazing. The PITI was barely more than the HOA payment! Anyhow, that 1995 owner doubled his money in just seven years and thus began a frenzy of quick flips and bubble exuberance.

Interestingly, the 2004 owner paid $519,000, but was unable to capitalize on three years of appreciation during the greatest housing bubble in history, and sold to the corporation in 2007 for $1,000 less than he paid (hopefully that transaction was the company bailing out one of its executives). Good one.

The corporate owners tried to unload less than a year after purchasing but ended up without a place for their misguided keisters in the game of Real Estate Musical Chairs. By 2008, all of the party guests had gone home and there was no one left to save them.

The loss on this apartment, assuming some fool with more stacks of cash than brain cells buys for full asking price, will be -$180,000 plus upgrade costs (which don't look cheap).

So here we are, after nearly two years on the market, farting around with one-buck price increases while the highly sought-after all-cash market gets smaller and smaller.

Not to mention, this is a less-desirable city view apartment. Why shell out all that money with no ocean view, I can hear the cash-flush buyers asking. Worse, this unit is being undercut by other city view apartments in the building:

$329,000
700 East OCEAN Ave #1102
2 bd / 1.75 ba
1,080 Sq. Ft.

$329,000
700 East OCEAN Blvd #2402
2 bd / 2 ba
1,080 Sq. Ft.

$279,000
700 East OCEAN Blvd #1902
2 bd / 1.75 ba
1,080 Sq. Ft.

Yes, they are short sales so the prices don't mean much until something closes, but just for one minute let's set aside the problems with short sales pricing (and the SS process itself) and assume you could buy one for $329,000. Your monthly payment with 20% down would be roughly $2,300--including that rapetastic $638 HOA fine. Rents for ocean-facing units are ~$2,000. The Rent vs. Buy ratio is getting awfully close for these units, meaning $329,000 seems like a decent price in the current market.

Which in turn means our seller isn't that far off.

The issue here is the myopic decision to narrow potential buyers to only those who have cash in-hand. It's seller suicide.

Why not just restrict your buyer pool to redheaded ambidextrous French-Canadian bird collectors?

In the meantime, we're looking forward to your next $1.00 price increase!

Moonwalking Away Goes Mainstream

Via US News & World Report:

Strategic Defaults and the Foreclosure Crisis [I really wish they would stop calling it a foreclosure "crisis." Debt is the disease and foreclosure is the cure--why don't people realize foreclosure is ultimately a good thing?]

Nearly a year after the Obama administration unveiled its ambitious housing rescue program, foreclosure tallies continue to break records. Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," RealtyTrac CEO James J. Saccacio said in a statement. "Many of those delinquencies will end up in the foreclosure process in 2010 and beyond."

Homeowners have found themselves in foreclosure for a number of reasons. Some purchased properties they could never really afford. Others lost their jobs--the national unemployment rate remains in the double digits--and had no way to make mortgage payments. But as the crisis rumbles forward, an additional driver of home foreclosures has become clear: Many borrowers have the means to keep paying the mortgage but are simply walking away because they believe it's best for their finances.

The number of so called "strategic defaults" more than doubled, to 588,000, from 2007 to 2008, according to a study by Experian and Oliver Wyman. A separate 2009 survey found that more than a quarter of all existing defaults were strategic. Meanwhile, a growing number of academics are touting the financial benefits of walking away. "Homeowners should be walking away in droves," Brent T. White, a University of Arizona law school professor, said in a recent paper. "The financial costs of foreclosure, while not insignificant, are minimal compared to the financial benefit of strategic default."

The case for strategically defaulting is linked to negative equity, or owing more on your home than it is worth. With home prices at the national level having dropped roughly 30 percent from their 2006 peaks--and a great deal more in certain bubble markets--a considerable chunk of property owners are now in this fix. Nearly 1 in 4 borrowers currently have negative equity, according to First American CoreLogic. And rather than continuing to make payments on an investment that's now worth significantly less than what they paid for it, many borrowers are throwing in the towel.

...

CLICK HERE FOR THE ENTIRE ARTICLE...

Losing Half a Mil on Signal Hill

I was up in Signal Hill last week for a group walk. Not only was it great exercise, but the views were absolutely astounding. I haven't been up there for a really long time and it reminded me how beautiful Long Beach at night can be.

On our route up, down, and around the hill, I realized just how out of control the development of SH was during the bubble. Good Lord! Practically every square inch of land was covered by a hulking McMansion!

However, there were some GORGEOUS houses up there in the gated areas. It kind of reminded me of areas in South OC like Aliso Viejo or San Juan Capistrano, actually. The nice aspects of suburbia like the little parks and playgrounds for the kiddies, newly paved streets, and clean-looking new construction. And the negative aspects like houses so close to each other that you can flush your neighbor's toilet from your bedroom (one development sported "houses" with shared driveways and a common wall running from the garages through the entire length of both houses), an utter absence of charm and character, and cookie cutter design.

Anyhow, it was strange to think of heavily-urbanized LBC having such striking similarity to South Orange County. I guess it's good for people who want the look and feel of suburbia (i.e. feeling "away" from the bad elements of the city, more square footage), yet still want proximity to city life and an easier commute to LA.


Address: 2155 RIDGEVIEW TERRACE Dr, Signal Hill, 90755
Asking Price: $895,000
Seller Paid: $1,350,000
Beds: 4
Baths: 3.5
Sq. Ft.: 3,322
$/Sq. Ft.: $269
Lot Size: 6,381 Sq. Ft.
MLS#: P711017
On Redfin: Since January 2009
Down Payment: $179,000
Income Requirement: $223,000
Monthly Nut: $5,300
Description: * * * NOT A SHORT SALE * * * Absolutely stunning executive home that shows and sells itself. Forever views to the mountains and Disneyland fireworks at night. .. even peek-a-boo views of the ocean! Kitchen upgrades include stainless steel appliances, granite countertops, large walk-in pantry, 2 sinks, wine rack, ample storage, and beautiful hardwood floors. Living areas and master bedroom are located on the top story of the home to enjoy the best views the home offers. Downstairs features the secondary bedrooms and a second family room. The very private backyard has impeccable hardscape with a bbq area featuring Viking appliances and a fire pit. The garage has epoxy flooring throughout and built-in cabinets. Truly a MUST SEE home in a beautiful gated community.

He purchased for $1,350,000 right at the peak and is asking $895,000. How the hell is this "* * * NOT A SHORT SALE * * *"?!

After commissions, this guy will lose FIVE HUNDRED THOUSAND DOLLARS. And unlike the dickhead from yesterday's post, this guy will be losing his own money. Half a million bucks?! How do you absorb that? I'm amazed he hasn't just walked away.

But maybe this guy was a CEO and his corporation will take the massive loss on the chin. After all, this is an "executive home," as evidenced by the "executive" wardrobe:

I thought I was excessive for having three white dress shirts, but get a load of this dude! Yowza! (For some reason I'm picturing one of those guys who wears tiny loafers with leather tassels on them. Maybe that's your thing, but they give me the creeps.)

And that $500,000 loss, of course, assumes he can find a buyer at the current asking price. Considering he just made it into the 365 Club (AKA, a year on the market) and has been stuck at the same asking price since November, it doesn't look good.

And that $14,797 annual property tax bill probably isn't helping matters either.

Nor is this mural confronting you in the entryway.

GAAHHHH!

But hey, some buyers may look at the artwork as a bonus! Some say investing in art is a good inflation hedge. Speaking of buyer bonuses, maybe if he throws in the classic 'Stang it'll help his chances:

Not sure what that Shelby GT350 hood scoop is all about (or the half-inch layer of dust) but at least it's not buried under laundry baskets and boxes of old receipts.

The only bummer with these houses--as with most McMansions--is the small back yards. Peep the Aerial View. This lot, just feet away from the noise and heavy activity of the security gate, is listed as 6,381 sq. ft., but as you can see it looks much, much smaller.

However, this guy did a nice job upgrading what little he had to work with:

And the kitchen, although captured in a picture so small it requires the assistance of the Hubble Telescope to make anything out of it, looks pretty good:

So, here we have plenty of upgraded, newly constructed square footage. The question I'm trying to answer is whether this price is approaching a decent deal.

Sales prices of Signal Hill comps are all over the map (like any area with a view, precise location is everything), so I have no idea what a good deal would be on this house. But obviously, as the heretofore lack of interest in this property demonstrates, $895,000 is not it.

This comp, also referred to as an "executive home," (what's with that?) sporting 2,945 square feet, an 8,000 square foot lot (1,600 more square feet!), new construction, and about 10 times more curb appeal, sold for $790,000 ($60,000 off the asking price) in July.

Unless market conditions have secretly improved since then, I don't see how our featured seller can realistically compete by asking $100,000 more than this comp.

I dunno. For ~$900,000 you could get a really sweet house in Bluff Heights. Not as new, not as big, but, uh, not in Signal Hill either. To each his own, I suppose, but when we're discussing the $750,000-$1,000,000 range, I shouldn't have to worry about assorted exercisers walking behind my house having elevated, unobstructed views of the inside of my house (and my sweet ass mural).

For this kind of dough I expect just a wee bit more privacy. I mean, isn't that the point of buying a house "away" from the crowded masses below?

Fun While it Lasted

Thanks Anonymous for sending this one in:

Hey El Bee,
New reader. Love your style. Keep it coming!

PS - What did you think about the 400k price reduction at 308 Claremont?!? But a short sale with the need for lender approval from two different banks. That's about as likely to happen as... 324 per sq ft in the shore though. Not that bad.

Address: 308 CLAREMONT Ave, 90803
Asking Price: $999,900
Purchase Price: $1,330,000
Beds: 4
Baths: 3.5
Sq. Ft.: 3,076
$/Sq. Ft.: $325
Lot Size: 3,454 Sq. Ft.
Year Built: 1969
MLS#: P706454
On Redfin: 98 days
Down Payment: $199,980
Income Requirement (4x income): $249,975
Monthly Nut: $5,900
Description: An amazing home in the highly sought after Belmont Park area on one of the most desireable streets. This is a unique three story home with fantastic water views from the third floor. Upon entering you quickly realize you have found something special, with a large step down formal living room with fireplace, built in cabinetry, and soaring vaulted ceilings. A large and open floor plan offering a spacious kitchen, dining and family room all looking upon a tranquil patio. The kitchen is perfect for entertaining, equiped with high end appliances and a large island all detailed in custom granite. A large family room, both open to the kitchen and outdoor patio. The second floor has two kids bedrooms sharing a full bath, laundry, and Huge Master Suite with large walk-in closet, separate shower and jacuzzi tub. The third floor is really quite amazing, Large entertaining room opens to the outdoor deck, with a complete outdoor kitchen, dumbwaiter, Spa, dining area, with amazing water views.

"desireable"?

"equiped"?

On a million-dollar listing? What a pro!

You want proof that we live in a fucked-up society with ass-backwards perceptions of "wealth"?

This short-selling poser, who clearly could never afford this monstrous testament to bubble idiocy, instead of showing some humbleness and shame in the face of a financial situation so abysmal that he's begging the bank for a FOUR HUNDRED THOUSAND DOLLAR WRITE DOWN on what he agreed to pay, is actually putting the reason for his horrible financial failures--his revolting materialism--on full display.

Observe:

A fleet of dirt bikes:

Big ass flat screen TVs:

Expensive Guitars:

Big ass flat screen TVs and expensive guitars:

And the ultimate trapping of the douchebag nouveau riche, a dedicated wine closet:

You stockpiled all of these material possessions to make people believe you were rich and now you expect the lenders and taxpayers to pay for your recklessness and HELOC lifestyle?

Fuck you, scumbag.

I hope your fake lifestyle was fun, you worthless leech, because now it's all over. I really wish there were debtor prisons in the US, because I would take great joy in the idea of you repaying your debt to society in a 8' x 8' cell.

But, instead you'll get the last laugh as you burden taxpayers with the fallout caused by your insatiable greed, rent for a few years to get back to so-so credit, then get right back into the over-leveraged real estate game and do it all over again with nothing learned.

This shit makes me sick.

According to the listing history, this gold-bricking shitheel bought in Spring 2005 for $1,330,000, providing the 2001 owner with about $400,000 in pure, uncut bubble profits. In a sign of the bubblicious times, it's worth noting that the 2001 seller only had it on the market for 19 days before our featured numbskull snapped it up (likely with a nothing-down Option ARM).

Jan 10, 2010 - Price Changed $999,900
Oct 09, 2009 - Listed $1,395,000
Jun 21, 2005 - Sold $1,330,000 (11.4%/yr)
May 02, 2005 - Delisted
Apr 13, 2005 - Listed
Jun 28, 2001 - Sold $865,000
Jun 25, 1992 - Sold $640,000
Jun 04, 1990 - Sold $50,000

After a few years of accumulating HELOC trophies and pretending to be rich, our seller finally figured out how Option ARMs work (better late than never, fuck face!) when his payment suddenly exploded into the stratosphere.

So in October 2009 he quickly threw it on the market for a hideously WTF price of $1,395,000--obviously trying to break even and brag to his buddies that he "didn't lose a dime."

Well, tough titties--you ain't breakin' even. And you know it. Hence last week's massive $400,000 price cleave.

For the record, this lotless wonder will easily find a buyer for the current listed price. But, as Anonymous so astutely pointed out, the two lenders (especially the second lien-holder) will never agree to a short sale.

Not in a million years.

So, an approved short sale at $999,900, much like this guy's entire lifestyle, is grand, unadulterated, unicorn-fellating fantasy.

Look, I love fast cars and automatic watches as much as the next dude (there is an inherent materialism built into us Southern Californians--I'll be the first to admit it) but the difference is I CAN ACTUALLY AFFORD THAT SHIT. I don't need to front, because my lifestyle has a big, fat PAID IN FULL stamp on it--I don't pay interest on shit for my indulgences.

I'd much rather live like the Stealthy Wealthy instead of ostentatiously faking my way through life like this dump, perpetually bouncing $45,000 in credit card balances to 0% APR accounts, leasing luxury vehicles and never driving further than San Pedro because I'm "over my miles" (what do you want to bet this shartmuffin has a leased CLS550 in the driveway?) and paying the bare minimum on toxic timebomb Option ARMs for houses it's so painfully obvious I can't afford.

I'd lambaste this loser for teaching his kids horrible life skills and values--that everything can just be put on a credit card--but what the fuck do they care? You'll just put another 150cc Yamaha on a 72-month payment plan and the kids will never question it.

Nor will they question how they became so overwhelmed with ball-crushing debt as adults. Hell, it will never even cross their minds because as the government has made so abundantly clear, someone will always be there to bail them out and ensure they never have to be responsible for living like such unabashed paycheck-to-paycheck $30K-Millionaires.

Hell, given the lack of repercussions for this guy, maybe I'm the one who was brought up with the wrong values?