Thursday, July 8, 2010

Didn't Even Last Two Years: FINAL UPDATE

Sold on 04/29/2010 - $432,000 ($292 per square foot)

In February I said:

But judging by the comps, and a price per square foot about to drop below the $300 mark, this seller might be able to find a greater fool for around $425,000. That still means a major loss, but at least he'll be free from his colossal error in judgment.

Damn, it feels good to be a gangster.

Congratulations seller on finding a slack-jawed dummy to take your ancient, overpriced digs off your hands. And buying at the "bottom" only cost you $79,000 in cold, hard cash.

Way to go!


3101 East 2ND St Unit 4C, 90803
Asking Price: $447,000
Beds: 3
Baths: 1.75
Sq. Ft.: 1,481
$/Sq. Ft.: $302
Year Built: 1963
MLS#: P716383
On Redfin: 34 days
HOA: $175
Down Payment: $17,880 (FHA)
Income Requirement: $128,000
Monthly Nut: $2,900
Description: Spacious Bluff-Park-Condo in great location . .. This top floor light and bright unit features 3 bedrooms, private balcony with peek-a-boo ocean view, newer paint and carpet, attic access, storage areas, and stylish mid-century designer accents throughout. .. Walk to the beach, LB Art Museum, restaurants, and shops. .. Well maintained smaller complex. Must See!

Dang, this is a pretty sweet place. Three bedrooms, nearly 1,500 square feet, a balcony, cheap HOA fee, and in a killer neighborhood. The solo garage spot is a bummer, but hey, you can't have it all.

One thing I like is how the owner used those "stylish mid-century designer accents" to create an overall 50s/60s vibe. I mean, check out this door knob:

And the original stove knobs and old school overhead vent:

Yeah yeah, some might say that shit just looks old, not "designer" (and they'd be right) but you have to admit the seller did a good job incorporating those outdated elements into a cohesive design theme. In a day where pergraniteel is "standard," it's nice to see somebody work with what they have and pull it off reasonably well.

The only major drawback I can see (besides the price, duh) is the proximity to busy-ass, terribly noisy Broadway.

But the good news is you're right across the street from Taco Bell!

I love that particular T-Bell because it's the only one on the face of the planet without a freaking drive-thru.

In any event, this unit appears to be on the 2nd Street side so the traffic noise probably isn't that bad.

So now that we've covered what the seller did right, let's focus on what they did wrong and the reason this property is a topic of discussion.

The sales history reveals this seller mistakenly listened to the bottom callers of 2008 and took them at their word that "the worst is definitely over," and agreed to pay $475,000 for this bad boy. And now, just 22 months later, he or she is trying to sell for a substantial loss. Peep:

Jan 07, 2010 - Price Changed $447,000
Jan 06, 2010 - Listed $449,000
Mar 25, 2008 - Sold $475,000
Jan 11, 2008 - Price Changed $499,000
Oct 26, 2007 - Price Changed $529,000
Sep 14, 2007 - Price Changed $559,000
Jun 23, 2007 - Listed $579,000
Jun 18, 2007 - Delisted
Apr 04, 2007 - Price Changed
Jan 31, 2007 - Listed

The interesting thing is that the previous owner had it on the market for almost exactly a year before our dim-witted knife-catcher decided to step up and take on more than he could chew.

Which means during that year he watched as the price dropped $20,000, then $30,000, then another $30,000 before buying at yet another $25,000 discount AND SOMEHOW BELIEVED THE PROPERTY VALUE WOULD MAGICALLY STOP PLUMMETING.

WTF was he thinking?!

By stupidly jumping in long before the bottom and catching this rusty Ginsu, he just cost himself a minimum of $50,000. And that entry-level loss tragically depends on finding some burlap-head willing to part with nearly $450,000. Good luck with that!

I could understand if this throwback was fully updated, but for this kind of loot most buyers will be looking for detached homes or similarly sized condos on Ocean Blvd. with real ocean views.

But judging by the comps, and a price per square foot about to drop below the $300 mark, this seller might be able to find a greater fool for around $425,000. That still means a major loss, but at least he'll be free from his colossal error in judgment.

At any rate, I think this charming apartment, in a killer neighborhood, is quite desirable...just not $447,000 desirable. That seems woefully overpriced in this ever-competitive market.

Guess we'll just have to wait for Mr. Market to tell us who's right.


  1. El Bee,

    The generation of "gimmee gimmee, can't wait and gotta have it now" will continue to support these paralel universe prices. Until there is a fundamental shift in how people value money and how delayed gratification enables true wealth, we will continue to see this behavior. I'd love to see the look on this FBs face when the next assesment comes in to repair the roof or some other unforseen issue. I now know two sets of families that have strategically defaulted on their homes where they had ARMs about to reset. Unless this idiot has cash reserves to ride this out, I see them selling for a loss in another couple of years. This consumer driven, instant gratification society has not learned a fucking thing from their elders.

  2. Yo Anon - AMEN!!!!!!!!!!!!!!!!!!!!

  3. And here's another pat on the back for "Anon". You nailed it, friend. I work less than a block from here. It's still "west of redondo", so its location doesn't justify pricing. And if the buyer has friends who want to visit after 6pm, good luck finding parking. It's brutal. Wonder how much deferred maintenance is waiting to rear its ugly head? As a condo owner, we paid emergency assessments twice in 5 years to the tune of $24k. those assessments are an ass-kicker. i live east of redondo, and we can't even get an appraiser to give us $248 a sf. And we are prime location. It's going to get worse real soon with the double dip. Anyone considering buying should just rent til the fallout clears. could be ten years, per the experts with which we've consulted. But there sure are some deals to be had in the rental market. I welcome it, as soon as that NOD hits! Taking forever. El Bee, you're a wonderful human being with a killer sense of humour. And you're doing a public service being honest. I love your blog.