Bottom Calling Bites Again: UPDATE

The price was "$334,000" and changed to "$324,900"

Ever since the Federal tax credit expired, I've been seeing an awful lot of $10,000 price reductions. Anyone else notice that?

P.S. This greedtard has been on the market for nine months and this is only the second price reduction. Great strategy!

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Yet another 2008 loser. How long until 2009 losers start showing up?

5898 East NAPLES Plz #302, 90803
Asking Price: $359,000
Purchase Price: $355,000
Purchase Date: 7/2008
Beds: 1
Baths: 1
Sq. Ft.: 719
$/Sq. Ft.: $499
Year Built: 1971
MLS#: R905905
On Redfin: 110 days
HOA: $240
Income Requirement: $90,000
Down Payment: $13,000 (FHA)
Monthly Nut: $2,500 (FHA)
Description: * * * REDUCED $31,000 * * * . This great home is located in the absolutely best area of Long Beach - Naples Island. This top floor unit features a large bedroom, tons of closets, eating area, fantastic kitchen with new microwave GE Profile convection oven, Berber Carpeting throughout, new flooring in kitchen and bathroom, fresh paint, new floor molding throughout, new lighting and high-end ceiling fans (one with a heater!), new kitchen and bath fixtures, new cabinet hardware in kitchen and bathroom, upgraded window in bedroom (double paned and tinted) and new Kohler toilet. Parking is underground, secured and gated

You call a 719 square foot one-bedroom apartment a "home"? Uh, okay.

Let's get right down to it: This guy bought into all the "the bottom is in!"/"the worst is over!" horseshit from the summer of 2008 and tried his hand at homeownership.

He failed miserably (not as badly as the 2005-2008 owner who lost about $80,000 when he sold to this guy) because just 14 months later he's trying to sell it...for a loss.

He initially tried to sneak in a bit of a profit and listed for $390,000 (probably based on this neighbor's September sale for $389,000 , but for whatever reason he wasn't as lucky). In fact, he was hit in the face with the frying pan called Reality and chopped $31,000 off the price.

At the reduced price of $359,000, his best-case-scenario will be a $20,000 loss including commissions and what he likely spent on cosmetic improvements (carpet, paint, outlet covers, baseboards, bathroom/kitchen fixtures and flooring--here is the old listing for comparison).

$20,000 in a year?!

But I thought Naples is Different(tm)?

However, given the 14 months of mortgage payments, a sale at this price will mitigate that somewhat.

But that's assuming he finds a buyer at this price. It's worth noting here that he's been stuck at $359,000 for two months now with no interest whatsoever. Zero. Zilch. Nada.

Although I think he has an outside shot at getting the current ask (Naples is a little different), another price reduction, given the time on the market, is inevitable. Which in turn spells disaster for his dreams of walking away relatively scot-free.

All evidence suggests he purchased this as an investment property and quickly discovered a "good investment" shouldn't bleed cash every month. Factoring in the tax advantages, he would have to charge $2,000 in rent just to break even on his mortgage!

Looking at nearby rents, he didn't come anywhere close to that and got absolutely pummeled by the monthly shortfalls. I guess he learned the hard way that Naples, although as prime as the number 101, ain't New York's Upper East Side when it comes to rents.

Hence, why he's jumping ship after such a short time.

Dude, what were you thinking buying this place? Did you even consult Craigslist for rental rates? If you had, you would have seen that two-bedrooms in Naples and Belmont Shore are well under $2,000 a month.

Plus, did you even consider who this apartment is for prior to buying? It's perfect for a retiree or a student, but neither of those groups can afford this place. And an individual (or couple, assuming they have no sense of personal space) pulling down the required $90,000 (and that's with a generous 4x gross income calculation) wouldn't be caught dead in this tiny (albeit tidy) place for $2,000 a month. Your pool of renters is quite narrow.

Instead of believing the perpetual bottom callers of CAR/NAR and CNBC, you should have been reading this blog. We could have saved you a lot of dough and heartache.

I have a feeling we're going to see a lot more of these failed "investments" in the near future as wannabe real estate moguls realize they're not alone. The sheer number of people clamoring for rental properties virtually guarantees further rent deflation due to overwhelming competition.

He's smart for trying to get out now instead of suffering through years of monthly bloodletting, but unless there is a miraculous Spring Bounce this guy could be in deep caca.