Asking Price: $499,000
640 ORIZABA Ave, Long Beach, CA 90814
Beds: 3
Baths: 1.75
Sq. Ft.: 1,564
$/Sq. Ft.: $319
Lot Size: 4,350 Sq. Ft.
Year Built: 1912
MLS#: 12136163
On Redfin: 19 days
Income Requirement: $114,000 (mortgage/3.5)
Down Payment: $100,000
Monthly Nut: $2,700
Description: STANDARD SALE. ABSOLUTE MOVE-IN CONDITION 3 BED. /2 BATH. THE PROPERTY FEATURES FIREPLACE IN LARGE LIVING ROOM, NEWER MAPLE KITCHEN AND GRANITE COUNTER TOPS, NEWER WINDOWS, NEW INTERIOR PAINT, TRAVERTINE FLOOR IN FOYER, AND HARDWOOD FLOOR THROUGHOUT LIVING, DINING AND BEDROOMS. INSIDE LAUNDRY AREA AND FAU/CENTRAL AIR.
PLEASE STOP YELLING AT ME!
This place was purchased in 2003 for $437,500, and the loanowner made it EXACTLY five years (hmmm...five-year Option ARM, anyone?) before trouble started. Knowing he couldn't afford the full payment anymore (or ever), he desperately tried to get out from under his obligation in February 2008.
After two years and 11 days of extend and pretend can-kicking and gaming the system (aka living rent-free while the bank dragged its heels), the bank finally took it back for $424,000 -- essentially the '04 price.
Just three weeks after taking it back, the lender slapped it on the MLS (it's funny how banks don't seem to be in any sort of hurry as long as a property stays off the books, but as soon as they take it back they suddenly snap into action)...with a $95,000 premium attached.
WTF?
They've since lowered the price to $499,000, which isn't crazy compared to some of the garbage that's selling these days, but that's still a chunk of change.
With all of the recent happy talk about "V-shaped recoveries" and good times being here again, it's easy to forget we're still muddling through the disastrous results of the Great Housing Bubble. You know, the bubble? Remember?
Here's a refresher course:
May 29, 2003 - Sold (Public Records) $437,500 (22.3%/yr)
Mar 09, 2001 - Sold (Public Records) $280,000 (262.4%/yr!)
Sep 13, 2000 - Sold (Public Records) $150,000
Ponzi-tastic!
Anyhow, this house is pretty sweet. It's on a reasonably sized lot in an okay neighborhood (a little too close to 7th for my taste), has a back yard, and looks crisp and clean on the inside.
I'm just trying to figure out why the bank thinks it will get such a hefty premium over what they paid (and nobody else was willing to pay) at auction.
Oh, who the hell knows. It'll probably be in escrow by the time I publish this.
Well, if you are under the age of 35, you don't remember when a new car was $2,600.(1972), so paying $26,000. now sounds reasonable.
ReplyDeleteMost entry level buyers are under 35. So if you don't remember when starter homes were $46,000.(1977), paying nearly half a million for a starter home probably seems OK.( My parents thought we "overpaid" at $46,000.)
Mostly a generational thing.Ask your parents
Anon,
ReplyDeleteThat's a good point. But just because something "sounds" reasonable doesn't mean it is.
I remember during the bubble when $350,000 was just the accepted cost of a shitty starter condo. It was a nice, solid number and I could never understand how that came to be so eagerly accepted. We're talking about 1960s apartments that sold for $180,000 just six years earlier! It's amazing what we can convince ourselves of when it comes to buying real estate.
It is funny to hear my mom talk about passing up a Naples duplex because it was "a stretch" at $30,000 or whatever. In today's dollars that sounds crazy (and in hindsight the "stretch" would have paid off 30-fold), but people forget that wages were nothing like they are today.
But you're right that most buyers don't know any different, so these prices seemingly make sense. And because of this, buyers don't bother doing their homework, and have no problem dropping half a million clams for a small house in a so-so 'hood because that "sounds about right." And these are the people I'm competing with.
I guess the bank thinks they can get the premium because of all the gov't support for the housing market. Interest rates are super low and most people think if the monthly payment is anywhere close to do-able, why not?
ReplyDeleteAren't most of the recent mortgages gov't insured anyway, so who really cares if they fail, right?
Just pray that if you buy now, you don't have to sell anytime in the near future. Becuase most suckers will have already bought and if (more likely, when) interest rates tic up, pricese should come down.
But that's thinking logically, silly me a home is an emotional purchase for most buyers.
My dad has a story about how he had a choice between a small house in Beverly Hills for $32k or a new condo in Culver City for $28k back in 1973. They bought the condo, which they made a little money on, but nothing compared to what would have been if they had bought the house in Beverly Hills...
ReplyDeleteInflation has really taken away a lot of the opportunties for younger people. In the late 60's, my boss moved into a "Beverly Hills-type" neighborhood. His wife did not work, and he had two kids. All this on one income.
ReplyDeleteToday, with my wife and I both working, no kids, we could not afford to even buy a house on his street.
Not really related to the topic, but I was saw an episode last night on HGTV called 'First Time Home Buyer' or some such. This episode was about a couple in Wisconsin (which I doubt was a severe bubble area) looking for a 4-bedroom under $350k.
ReplyDeleteThe agent found them 3 reasonable properties close to their budget. All were very nice, spotless, 4 bed/3 bath, 3000 sq ft on manicured lots. The wife's gripe? No granite countertops. Her attitude was "tell them to install granite, and we'll consider making an offer."
Another episode had a couple walk into another very nice (and supported by comps) colonial, and they balked because the basement was only partially finished. "I can't do my scrap-booking in this!" she said. The husband says "Well we'll factor in this short coming if we make an offer". It's already factored in, you idiot!
I would hate to have to sell these days, what with the generation of pergraniteel crybabies making up the buyer's pool.
This comment, El Bee, is not directed at those looking to buy in the previously-insane bubble areas like yours.
Have you seen this listing?
ReplyDeleteP728624
Anon,
ReplyDeleteI have. The bad news for that guy is the Pepto Dismal http://longbeachhousingblog.blogspot.com/2009/09/pepto-dismal-update.html unit sold for $287,000 in February. Comp Killin' in the LBC!
He'll lose a cool $100,000 before this is over.
I think this house is worth 300K, maybe 325K at the MOST, depending on the backyard (of which, there are no photos of course).
ReplyDeleteMike,
ReplyDeleteI think photo #15 is the backyard. It's tough to tell. If that is in fact the yard, it looks small, but I'd be happy with it. As long as my (future) dog has enough space to cruise around and fuck with birds, I'm happy.
It's worth noting that this house is very close to St. Matthews church and its loud ass bells, so buyer beware. I like this house, but the location needs to be better reflected in the price.
Given the interior, I think $325,000 would be a steal.
Looks like this house has some serious structural issues. Take a harder look of picture #11. There is a good size triangle shape gap under the door. That corner of the house is sagging. Signs like this shouldn't be overlooked.
ReplyDeleteL_Thek_Onomics
Olaj,
ReplyDeleteWow, what a great observation! That gap is really bad. And portends really bad things.
@Olaj, Yeah, I'm the recent buyer. Seller paid for a new foundation + credit for issues discovered during the inspection.
ReplyDeleteAnon,
ReplyDeleteThanks for the update. A new foundation sounds like a pretty good concession!
I won't ask what you paid, but I hope you got a good deal. You definitely got some good concessions! That's a nice, clean house you got there.
ReplyDelete