Tuesday, June 29, 2010

2004 Pricing in The Shore has Arrived

With the 2010 Super Summer Selling Season(tm) over before it began, sellers like this should be sweating enough bullets to fill Camp Pendleton.

210 SAINT JOSEPH Ave, Long Beach, CA 90803
Asking Price: $999,000
Purchase Price: $1,145,000
Purchase Date: 9/2006
Beds: 3
Baths: 2.5
Sq. Ft.: 2,343
$/Sq. Ft.: $426
Lot Size: 2,970 Sq. Ft.
Year Built: 1924
MLS#: Y1001993
On Redfin: 91 days
Description: Ideal Belmont Shore location situated between 2nd and Livingston Drive so close to stores/restaurants, Livingston Park and Playground, as well as in desirable Lowell Elementary and Will Rogers Middle School District. Not a short-sale or bank-owned property. Remodeled in 2006 with new Tile Flooring, Updated Kitchen with Granite Counters and Stainless Steel Appliances, Newer Stucco and Dual Paned Wood Windowns, Inviting 2-Story Entry with Staircase, Family Room with French Doors to Backyard with Patio and Grassy Area, Separate Office or 4th Bedroom, Sundeck of Master Suite, Vaulted Ceilings, Skylights and Formal Dining Room. Wonderful Master Suite with Large Private Bathroom featuring Spa-Style Shower, Travertine, and Whirlpool Tub.


"Sundeck of Master Suite"?

On a million-dollar listing? Way to give it your all, dipshit.

Given that the current asking price of $999,000 is firmly in 2004 territory and he has yet to garner any interest, you'd think the seller would be on the precipice of a massive panic attack, hammering his agent about making this listing tighter than an AARP member with a coupon and a tip calculator.

But, no dice. I guess it's only money, right?

And how much money are we talking about? Well, after "buying" this place for $1,145,000 in 2006, in March of this year he finally stopped pretending he could actually afford this house and listed it for $1,094,000. When that didn't work, he lopped off $51,000 like a plantar wart and here the property sits, unoccupied, casually waiting for a miracle from the Lord above.

May 25, 2010 - Price Changed $999,000
Mar 30, 2010 - Listed $1,094,000
Sep 11, 2006 - Sold $1,145,000 (+7.9%/yr)
Aug 20, 2004 - Sold $980,000 (+8.7%/yr)
Jun 24, 1994 - Sold $420,000

Assuming he could get the (soon-to-be-reduced) $999,000 asking price, the four years spent living the delicious lie that he was "rich" because he lived in a million-dollar house in Belmont Shore will cost him, at a minimum, -$206,000. According to the listing this is not a short sale, meaning that enormous loss will be taken directly on the seller's chin.


But that horrific loss is predicated upon this dude actually selling for a cool mil. It's worth noting that only two properties have sold for anywhere near that kind of money during the last six months.

But still, this place is located in the heart of The Shore and it appears to have many nice accoutrements of the Great Housing Bubble:

Although, what's up with this bathroom? Talk about a shrine to bubble exuberance!

I mean, is there any travertine left in that quarry?

The exterior is fucking hideous as far as I'm concerned, but to each his own.


Take a look at that nasty stucco job. Ugh.

We can debate appearances, but you can't argue with the market. And the market hath spoken: This thing is overpriced and every week that goes by without a price reduction serves to make that fact even more glaringly obvious.

If he were truly serious about competing for the few remaining cash-flush buyers out there, he'd aggressively slash the price and try to ignite a bidding war while he can. But for whatever reason he's just chillin', waiting gingerly as more negative economic factors weigh on an already severely challenged high-end market.

This is a great candidate for a walk-away. Think about it: the house has already been abandoned, there's absolutely no staging, the only price reduction occurred more than a month ago, he's already staring down the barrel of a $200,000+ loss...clearly there is no hurry to realize the horrific loss that would result from actually pricing it right. He's not worried about selling because he's already mentally checked out.

I can virtually guarantee one thing: if this guy moonwalks away from his debt-trap, the bank will foreclose and get it back on the market IMMEDIATELY. This seller clearly had a big down payment (remember, not a short sale), so the loss to the bank's balance sheet would be minimal. Given that, I very seriously doubt a lender would delay foreclosure or keep it off the market and play extend-and-pretend through the fall and winter months. Delaying foreclosure and encouraging squatting is typically reserved for houses waaaaaaaaaay underwater that banks don't want to take onto their books.

Some might point out that a sale within 5% of this sales price is possible. After all, on the face of it a 2004 price for generous square footage in a prime area sounds pretty attractive. And when you consider it sold in 2004 for $980,000 WITHOUT A SINGLE ONE OF THESE UPGRADES, $999,000 sounds like an even better deal.

The expired first-time homebuyer tax credits (Fed and soon State) wouldn't be a factor for buyers of million-dollar homes anyway, so selling this house on the open market relies solely on all-cash buyers or those who are comfortable with Jumbo financing. That's an awfully narrow field of potential buyers, but anything is possible in this crazy market.


  1. My partner and I like to play the "what is it going to be worth?" game. When we see the house and the list price, we try to guess what it would have sold for in 1999-2000, which is about where the market will eventually settle. We walked by that stucco nightmare the other day, I called $550, he said $600. It sold in 1994 for $420, so neither of us is far off, especially with some of the upgrading (provided it was done professionally and not "flip quality"). I hate the stucco job so much we didn't bother to go inside.

    Love your blog, you put to print what I can only spew at unwitting friends and neighbors who don't want to hear about it.

  2. http://www.reuters.com/article/idUSN2916439020100629

    The Federal tax credit looks like it will be extended until Sept. 30 for those who signed by April 30. Passed the House yesterday, and now onto the Senate.

    Of course, it won't matter for this gem, but can it be too much longer before we get a new credit?

  3. JChet,

    The more I look at photos of the stucco and the front of this house, the uglier it gets. Honestly, I have a feeling the repulsive exterior is prompting most potential buyers to do what you did--just keep walking.

    Although I think this place will lose considerable "value" by the time we hit bottom, $550k seems optimistic. That's $233 per square foot for a house with double the square footage of a typical BS property. But, you never know.

    Thanks for reading!

  4. Sup El Bee, hope all is well with you and yours.

    I love watching HGTV, because you get to seem homes in all kinds of different areas, even areas around the world, and see how homes go for different prices due to location.

    This is known as an upper-class hood, but personally I don't like it. Parking SUUUUUUCKS for one thing. Secondly, it's a lot of FORCED character around there. Meaning that everyone tries to make it FEEL like a happening/cozy place, but I always come away feeling that it's under a big cloud of phoniness. Not sure if that will make sense with anyone, or if anyone feels what I'm feeling, but whatever...

    Conversely in Manhattan Beach/Redondo area, it's a nice area, but it doesn't have that same phony/PC cloud hanging over it. Maybe I'm trippin...

    Anyways in another location this place could be had for $150K (Las Vegas, for one).

    It's out of my personal price range, but I wouldn't plunk down that kinda money on a place like this, where it's absolutely surrounded (like all the "houses" in that area are) and gives you that cramped feeling, and the parking is terrible.

    "Oh but you're right next to 2nd street" is what some Long Beach true believers will tell you.

    I'll take the chance on missing out on that.

    A lot of people in Long Beach are just as phony and annoying as people in Hollywood (in my personal opinion). I see no reason to overspend by 500K plus to be around them.

  5. Carl,

    Part of me thinks a $15,000 credit is inevitable, but another part of me thinks people are finally starting to wake up to the fact that all of this spending and money printing really hasn't done much (failing to pass unemployment extensions could be the canary in the coal mine). I hope there isn't another free pony because I'm dying to see what the market looks like without government intervention (although low interest rates will likely be with us for a long time).

  6. Dave in Alamitos BeachWednesday, June 30, 2010

    Is that deck photo for this listing for real? I can't imagine a more dismal photo. A couple of tired chairs looking out over a "view" of billboards, electrical wires, telephone poles, and an alley? Where do I sign?

    Oh, and how do we know this guy put down a large down payment? I would guess that he went zero down and maybe got a HELOC to pay for the upgrades. He's probably not out too much money, unless someone knows something I don't.

    And about being cramped? Well, I think it's the wave of the future. I'd rather be cramped in Belmont Shore than have all the space in the world in Hesperia, Hemet, Lancaster, etc.

  7. Hi Dave,

    The strongest evidence he had a big down payment is that he's facing a $200,000 loss and this is not (yet) a short sale.

    Of course, I have no way of knowing if he in fact put down a chunk of change rolled over from a bubble sale, but it seems to fit the picture.

    Plus, if he had put 0% down he probably wouldn't be wasting everyone's time trying to sell it for this price -- he would have just walked away.

    Then again, the place is as empty as Al Capone's vault, so maybe he's planning his great escape...

  8. Hey,

    Some great comments today!

    I have no idea wtf is going on with this place..all I can add to the conversation is that I have been in this predicament....Things collapse and you're left holding your D*** in your hand. Not sure how they measure whether it's a shor or not, but he could have heloc'ed the thing to kingdom come, but the first is still within range.
    Point is, when things go bad, thinking gets cloudy. You are fending off claims DAILY. Squeaky gear gets the grease and then you try to sleep. Seriously, when you're in financial straights, it's a day-to-day 'lifestyle'.
    I would expect many more of these types of sales and really empathize with the sellers. They're experiencing a valuable but painful lesson in reality.
    There are only so many Real Estate magnates in this world....we are not one of them.

  9. Check out the street view after clicking the link and scrolling down: the houses across the street don't impress me as belonging to an almost-$1 million neighborhood.

    If anything, this house and the one next to it stand out like sore thumbs.

  10. FYI - north of Second is Belmont Park, SOUTH of Second is Belmont Shore. Also he likly put down $229K beacause the only mortgage is for $916k in 2006.