Friday, July 9, 2010

The Pinhead Premium: UPDATE

Sadly, much like that 4th of July parade in Iowa, someone's about to get trampled.

After chasing the market for ages, doling out piss-ant 4% price cuts, this tidy place with possible structural issues (thanks Olaj!) is asking $479,000...the same price from April!

It's time for the bank to get serious. The distressed asset manager (hyphen intentionally left out), who seems to think he'll be a hero if he can eek out a small profit for the lender after commissions (the bank took it back at auction for $424,000), failed to notice that the market had already spoken:

THERE IS A VERY GOOD REASON NOBODY OUTBID THE BANK, AND THAT REASON IS THE MARKET DOES NOT THINK IT'S WORTH A PENNY MORE THAN $424,000.

Until the bank at least gets below that price, I simply don't see how this nabs a sale. Then again, I noticed the transaction price from the bank taking it back is no longer on Redfin, so maybe buyers uninterested in performing due diligence will glady cough up this kind of dough.

By the way, when buying an REO (now characterized as a "standard sale" in the listing, which is technically true but a bit misleading), the bank is not responsible for any structural issues or repairs. As-is, baby. Good luck with those wonky door gaps:


++++++++++++++++++++


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.

4 comments:

  1. When looking to buy a house, one of the top things for me to look at is the yard. Amazing to me how pics of the yard aren't taken. Is there any backyard here? Is it nice? Patio? One can only imagine.

    To me, anything over 370K seems overpriced.

    Remember that the little gangbangers getting shot, is taking place right down the street.

    ReplyDelete
  2. Elbee, our favorite Kung Fu house is back..

    http://www.redfin.com/CA/Long-Beach/109-Park-Ave-90803/home/7602101

    Morekaos

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  3. time to head to TN and KY for the week.

    Just checked 90808 for the first time in a LONG time...

    Lookie here...

    http://www.redfin.com/CA/Long-Beach/5902-E-Adderley-Dr-90808/home/7566282

    Listing Price is $208K less that the previous purchase price. OUCH!!!!

    ReplyDelete