Wednesday, April 14, 2010

Short Sale Sob Story

1747 East 2ND St, Long Beach, 90802
Wishing Price: $999,000
Beds: 4
Baths: 2.75
Sq. Ft.: 2,550
$/Sq. Ft.: $392
Lot Size: 4,620 Sq. Ft.
Year Built: 1914
MLS#: F1822956
On Redfin: 184 days
Income Requirement: $250,000
Down Payment: $200,000
Monthly Nut: $5,500
Description: Amazing location!! Alamitos Beach south of Broadway just a quick walk to beach and Bixby Park. The home was substantially remodeled and expanded over the last several years and offers unparalleled charm and location. All new copper plumbing and newer dual zone a/c and heating system. Beautiful 4 bedroom 3 bath home in great beach location!!

This has to be one of the ugliest million-dollar houses in Long Beach. It took me a few minutes to figure out this asking price wasn't a typo.

That's because despite claims to the contrary, this is not an "Amazing location!!" Sure, it's just blocks from the sand, but it's down past Esperanza. Even if you wanted to park your car on the street here, you couldn't anyway because this neighborhood is ground zero for cheap, high-density apartments.

Forget bungee jumping or swimming with Great White sharks sans diving cage, if you want to get your adrenaline pumping just walk around this 'hood at night. I've made that mistake before and I'll never make it again.

"El Bee, how dare you! I live in this area and I feel perfectly safe at night. In fact, the toothless, cart-pushing homeless dudes near the Rite-Aid serve as our Neighborhood Watch."

Hey man, good for you that you feel that way. But I have this thing called a sense of self-preservation and especially if I'm spending A MILLION FREAKING DOLLARS, I want to feel as safe as a lil' joey in his momma's pouch at all times.

Anyhow, this idiot purchased in 2005 for $680,000 (which even for the bubble seems outrageous given the marginal neighborhood), and insists the value appreciated by $220,000 during one of the most horrific housing crashes in the history of carbon-based lifeforms.

"So what, El Bee, we see this kind of greed-faced horseshit all the time. Why feature this particular pig?"

Well, the reason is because even if this place sold for its million-dollar price tag, it would still be a short sale.

That means this fool hit up the Housing ATM for HUNDREDS OF THOUSANDS OF DOLLARS, lived the high life for a few years, and now expects the bank (i.e. you and me) to eat a shit sandwich while he walks away with a slightly dented credit score and no tax liability for the forgiven debt.

Fuck yeah! Awesome! Sign me up!

Uh, P.S., after 184 days on market, there is no shot in hell this place will sell for $999,000. I don't give a crap how much of that HELOC money went into this "substantially remodeled and expanded" dump (and by the way shitbird, if it's so impressive why not include, oh, I dunno, A FUCKING PICTURE?!) this price is way out of line with local prices, local rents, local incomes, and reality. A million dollars is a straight up Mario Brothers pipe dream.

Which means only one thing: Gaming the interminable government system of HAMP, HAFA, HARP, HEAP, HERB, HARK, HANK, HOOF and FASB (the accounting rules that allow banks to keep non-performing loans off their balance sheets, thereby incentivizing said banks not to foreclose) for a year or two and living rent-free, saving a small down payment so he can re-enter the housing market with a government-backed FHA no-skin-in-the-game loan, and eventually sticking taxpayers with the tab racked up by his greed and ignorance.

What a country.


  1. Hey Elbee,

    Thanks for keeping it real.

    Its easy to get discouraged chronicling the slow motion shitstorm. I always appreciate each of your postings, despite their diminishing frequency.


    P.S. While I never felt particularly unsafe walking around this area when I was young and single, I agree that any sane buyer would have different expectations for a cool mil, or even the 500 large that this place might be worth in a sane world if it were in a better neighborhood.

  2. FreedomCM,

    Always good to see you in the comments.

    The ex-lady lived down on Junipero/5th and I'll never forget walking from the Passport stop on Cherry/Ocean to her pad one night. It felt straight out of Blade Runner.

    I realize my first purchase won't be in a 100% safe gated neighborhood, so I'm not expecting perfection for my budget, but yeah, a million bucks? Why not just buy in the Shore? Or Naples? Or Irvine!

  3. Agree that for a mil there are better nabes but Alamitos Beach is not that unsafe as it seems, just poorly lit with too many bums.

  4. Nice pad on the outside, too bad the 'hood sucks. I think it's at least $100k overpriced at this point. If I were this dude I would just stop paying the mortgage and wait and see how long it takes for them to process the foreclosure- it might be a year or 2 of living rent-free.

  5. Anon,

    "...just poorly lit with too many bums" doesn't exactly sound safe to me, but perhaps I am being a bit too harsh.

    However, what you just described would sound positively horrifying to your average family earning the required $250,000+ per year.

  6. Qualified,

    Surprised to hear you say only $100,000 overpriced. Check out this sold comp (one of the few to sell this year):

    On a bigger lot, well-upgraded, has two rentals on the property, is in a stellar neighborhood (check out the overhead map for a comparison)...and $910,000. Our guy cannot possibly compete with that and IMHO is several hundred thousand dollars overpriced.

    Maybe someone can email me with the NOD info to see if he's already started his journey into rent-free living...

  7. Agree El Bee...though if BAC is involved, the free rent period may be significantly reduced...

    From the post...
    I attended a local Building Industry Association conference on Friday 26 March 2010. The west coast manager of real estate owned, Senior Vice President Ken Gaitan, stated that Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010.

    maybe these folks are rushing for the exit.

  8. True, for a million dollars there are safer neighborhoods. But I'm sure there are houses with higher asking prices in Venice Beach which is much much more dangerous then Alamitos Beach.

    Regardless of ones perception of Alamitos Beach (I have a higher one) the days on the market number clearly shows they're asking too much. My point was just that comments regarding the safety of this neighborhood was based on perception of what it felt like AT NIGHT, but hey, it scary at night anywhere without enough lighting.

  9. I realize I'm late to the party on this one, but I just have to say El Bee that you were in RARE form on this one!

    "felt like you were in Blade Runner" ROFL!