5585 East PACIFIC COAST Hwy #163, 90804
Asking Price: $200,000
Purchase Price: $100,000
Purchase Date: 6/2001
Beds: 2
Baths: 2
Sq. Ft.: 913
$/Sq. Ft.: $219
Year Built: 1970
MLS#: P688126
On Redfin: 236 days
HOA: $273
Down Payment: $40,000 (UPDATE: FHA unavailable in this building according to reader JK)
Income Requirement: $50,000
Monthly Nut: $1,300
Description: ...
No Description? Are you serious? I give realtors a hard time for taking hundreds of days to fix listing description typos, but you're too lazy to even write the description!
Oh, don't worry--it gets worse. Check out the other God-awful interior shots:
They look more like Rorschach tests than listing photos.
The history of this property sure is interesting:
Jan 07, 2010 - Price Reduced $200,000
Oct 14, 2009 - Price Increased $220,000 (price increase--smart!)
Oct 14, 2009 - Relisted
May 20, 2009 - Listed $215,000
Jun 11, 2001 - Sold $100,000
Jan 25, 1996 - Sold $92,500
Mar 31, 1995 - Sold $500 (WTF?)
May 30, 1989 - Sold $99,500
Of note, during the 12-year span between 1989 and 2001, this apartment only appreciated $500. Ouch.
But, the 2001 buyer (and current seller) lived through the bubble and saw "values," and his perceived equity, skyrocket. So in 2009, after eight years of ownership, he tried to cash in on that magical appreciation and double his investment.
After five months with no interest, he did what all smart Long Beach sellers do--he raised the price. I guess he conveniently chose to ignore the unprecedented housing implosion of the last two-and-a-half years. Anyhow, with this recent $20,000 price cut it seems he's finally woken up to reality.
Just for fun, let's also choose to ignore the unprecedented housing implosion when trying to figure out whether this is a decent buy. But, in fairness, I will also ignore the artificial, easy-money-fueled runup in prices during the bubble and calculate a flat (and generous) 4% appreciation rate for the last eight years.
$104,000 - 1 year
$108,160 - 2 year
$112,486 - 3 year
$116,986 - 4 year
$121,665 - 5 year
$126,532 - 6 year
$131,593 - 7 year
$136,857 - 8 year
Uh, yikes. At $200,000, this guy seems way overpriced.
And for those who would argue a present value of $136,857 seems too low in this "new paridigm" of real estate, well, I'd refer you to the State of California:
2008 Tax Basis: $138,067
However, as we've learned there is a vast difference between what something is truly "worth" and what someone with a subprime, no-skin-in-the-game FHA loan will pay for it.
So, although I believe $138,000 is about right as far as true value at the bottom, let's just look at the current asking price of $200,000 and objectively determine from a Rent vs. Buy perspective whether this is a good price.
The monthly nut, including Principal, Interest, Taxes, and Insurance/HOA will be roughly $1,300 with 20% down.
Asking rents are about $1,500 per month, so it appears this place pencils out (assuming they could get full asking rent and that rents don't deflate any further) if you go with traditional financing.
Well would you look at that!
This $200,000 price is only a few days old, so maybe it'll finally be enough of a price reduction to nab a sale. Good for them for dropping the price to what appears to be a reasonable figure. But...
WHAT TOOK YOU SO FUCKING LONG?
While you've been taking your sweet ass time ("I'm not going to just give it away! I'm entitled to my bubble equity!"), this is what happened to the price per square foot:
That's gonna leave a mark.
More bad news: You have competition. Another two-bedroom in this complex, which has been rotting on the MLS for 250+ days, claims to have a short sale approved for $200,000 (I won't even bring up the upgraded short sale asking only $159,000).
But, given the headaches associated with short sales, you're probably safe. With a 5-10% drop, I wouldn't be surprised to see this thing to go into contract very soon (whether it will continue to plummet in value--especially given its street-side location--is another matter altogether).
Don't forget the HOA of 273.00/mo for this glorified cell block. I can't believe that someone was crazy enough to pay 230K for another unit in this sec 8 housing candidate in Sept. Absolutely insane!! This country is completely and utterly fucked.
ReplyDeleteAnon,
ReplyDeleteYeah, how do you think that $230,000 knifecatcher feels right about now? Could you imagine being $30,000 underwater in just 90 days?!
What an idiot.
I know this building extremely well. First of all anon..it's not section 8, there's a lot of good responsible people living there.(No I don't live there but did at one point.)The HOA fine is about normal for LB. And it has good amenities. At least if you're going to pay an extra 200/mo. it should have at least a pool and a jacuzzi to me. That's not the case with many places in LB.
ReplyDeleteThe unit that went for 230k was a much more interesting situation. The guy once tried to sell during the bubble and had an offer..are you ready? for 370k but turned it down because he wanted over 400k. Now that's insane and greedy. They ended up foreclosing on him and the bank sold it at 230k. It's a much nicer remodeled unit w/porch.
The problem with the unit el bee profiled is that it sits on the worst possible location..facing PCH. It's as loud as the airport runaway right there. The other short sale at 200k faces PCH also, just on the other end. Both of these units also at are the side entrances of the building which makes it even more noisy. I'm not sure what's up with the unit that was listed at 159k as the tax records show it as a 1 bdroom.(the realtard never listed the unit number..something funny going on there).
One problem with the building is it's not FHA approved so that kills the selective pool of buyers unless they come in with a bigger down. If you think these prices are still high..look at Stoneybrook and the price per sq. ft. Same neighborhood, granted nicer grounds, but 1 bdrooms there are still going over 200k. WTF? This should be a case study of what will happen when FHA either raises it's minimum down payment in the future and rates start rising.
IMHO I don't think the entry level is yet at it's bottom in LB, never mind the move up market which will be taking bigger hits this year and next.
JK,
ReplyDeleteGreat comments, thank you.
If the price was right, I think this would make a decent rental property for CSULB students (with a fat security deposit and co-signing parents, naturally).
That is freaking amazing about the tool with the $370,000 offer.
You're right on El bee. The place is a mix of college students and working professionals.
ReplyDeleteI talked to the realtor that brought the guy the guy an offer for 370k and I believe her. We both just shook our head on that one.
Let me get your opinon on this one. I was looking at this property on 1066 Gladys Ave (sorry I can't seem to paste links here). This guy bought it a good discount and closed at the end of Christmas. After taking time off for the holidays it looks like he's trying to flip it at almost a 50% profit.(before commissions). Do you think he'll be successful? I suppose if he's not he can rent it for cash flow. Of course, he might actually have to lift a finger if he does that..like clean, (or get rid of ), that frickin filthy carpet.
el bee, long-time reader, first-time poster. Though I don't agree with you on all points, I really enjoy ALL of what you write. There are more RE agents reading your blog than you may guess. Simple fact is, it galls anyone who is educated to see what some will try to pass off as 'work' because of laziness. I would like to point out that a lot of what you lay at the feet of my realtard brethren belongs more squareley at the door of the bank aka, 'corp owner'. A LOT of the shenanigans you perceive in the pricing history on a short-sale listing is the fault of the bank. Everybody has to guess at what the bank may ACCEPT as a price for short sale - the loan-owner knows where he's at and in the meantime the listing agent is trying to list the place to get it sold, unfortunately, sometimes before a short-sale request is accepted. As to this listing it isn't defendable of the agent to do so little work - no description and crappy pics; but really - you should go see the place -those pics do it more justice than it deserves. (BTW I know I overuse hyphens- can't help it!) The owner rents to his cousin and I'd have to guess that he/they are in arrears to the HOA because there is a hole 8" to 12" across is ceiling above the commode in one of the bathrooms. I'm not that bad with dimensions - there wasn't a working light in that bathroom! There also wasn't a light to be able to see in one of the bedrooms. Whether it was for lack of a bulb to replace a burnt out one or a lamp to plug in to the wall socket the switch operated was not clarified by the ramblings of the resident tenant who, it must be said is a likeable kid. As if the hole in the ceiling shouldn't be enough to kill my clients' enthusiasm for this place - there is an at least 8' long crack along the wall just out from under (bummer- it could've been under) and parallel to the NICE crown-moulding in the LR. The street noise IS brutal, which brings me to my curiosity killed the cat point which compelled me to finally share - how did you discern this units' street-side location? I'm a noob at Redfin - only use to peruse listings from your blog so I might have missed that info there. And I presume you wrote the existing final paragraph ( I'm reading this in late Jan., so that isn't necessarily true) before JK commented. Just curious.
ReplyDeleteI am in awe of both your analytical skills and prose. A joy to read. I have to remind myself often you aren't painting all of us realtors with your brush of scorn. At least I hope not- I don't have the self-loathing to bear it. I strive to be scrupulous and exacting in my dealings, so I thank you mightily for the drubbings you pass out to the idiots out there who crap it up for the rest of us. Sorry if I rambled. Many thanks!
Anonymous,
ReplyDeleteI definitely appreciate your readership--and especially your on-the-street insight (especially about the interior of this apartment).
I do bash the hell out of realtors, but only the ones that deserve it. Although lenders, appraisers, mortgage brokers and over-their-head buyers deserve blame as well, the realtors are just so easy to pick on because many are so incredibly lazy. It's astounding.
I would be straight up embarrassed to demand a commission in the tens of thousands of dollars if I misspelled Belmont Shore or the word Tower (like the Toweer of Babel post).
Seriously, no other business in the world tolerates the level of laziness and illiteracy that seems to permeate the realtor game. If I tried to pull that stuff at my job, I wouldn't be employed much longer.
Which is good news for you--because if you are just 10% more attentive, scrupulous, and hard-working than the bulk of moron realtors out there, it will be noticed and you'll be infinitely more successful than they.
And when realtors do a good job with photos and descriptions (the fundamentals of marketing a listing), I'm the first to applaud them. For realtors that actually take pride in what they do, I know that it can be really hard work. But your profession has taken a PR hit due to sheer laziness and uneducated newbies getting into the realtor game (hell, they can't be a bartender forever, right?) during the bubble with no economic acumen--leading to people (like friends of mine) getting into untenable situations.
To answer your question, I added the street-side info after JK's comment--just in case readers don't make it to the comment section, they would get that info in the post.
Thanks for reading and I hope to hear more from you soon! (P.S. Pick a handle--I can't keep all the Anons straight)
JK,
ReplyDeleteThat Gladys apartment just went into Backup Offers, so that flipper stands to make a nice little profit. We'll see what happens.