2004 Pricing in The Shore has Arrived: THROWING IN THE TOWEL

Officially off the market.

Wow. No takers despite its 2004 price.

He only lasted three months on the MLS before skulking off into the night with his tail tucked between his legs.

Better luck next summer, buddy.

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

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.

"Windowns"?

"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.

Yikes.

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.

WOOF.

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.

$50,000 Off in Just Four Weeks...How Low Will it Go? FINAL UPDATE

Sold on 08/24/10 - $325,000

I can't say that I'm terribly surprised, given the location, ultra-low interest rates and woeful lack of quality inventory in Long Beach.

But I still believe the new owner substantially overpaid.

Sorry, I don't care how close it is to the ocean -- when you're plunking down nearly TWICE what it costs to rent, you're getting ripped off and you obviously haven't done your homework.

Oh well, it's a nice pad and the new owner can move on with his life and start enjoying his close proximity to the action. I'm a tad jealous. This was one of the few properties to actually pique my interest during 2010.

And by the way, since this one-bedroom has now become a sold comp at $360 per square foot, what do you think this idiot is thinking right now, still languishing at $450 per square?

"Well I'm not just going to give it away!"

Sorry for the lack of posts, but like I warned my readers a few months ago, real life has taken a more prominent role and I simply don't have as much time to research and write about real estate. The good news is that my professional life is really taking off, the bad news is that impinges on my free time.

I will be traveling pretty much non-stop until October -- and possibly beyond. It's worth noting that I just turned 839,000 airline miles. And that's just on American Airlines.

But, I will try my hardest to keep you updated on the Long Beach real estate scene as the double-dip recession takes hold (that's assuming you believe we've exited the 2008 recession in the first place), free government ponies die off as we approach the mid-term election, and the economy slows once more.

Who knows, by then we might have 4.0% interest rates. Should be interesting!

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

I sent my buddy W the link to this apartment a while back and when I saw him at the BBC a few nights ago he mentioned it had already been on his radar. We tried to determine how overpriced it is (there was no debate about whether it actually is overpriced) while agreeing it is big, very nice inside, and in a prime location.

3819 East LIVINGSTON Dr #4, Long Beach, CA 90803
Wishing Price: $329,000
Beds: 1
Baths: 1
Sq. Ft.: 902
$/Sq. Ft.: $365
View: Peek-A-Boo
Year Built: 1959
MLS#: S619384
On Redfin: 31 days
HOA: $300
Down Payment: $13,000 (FHA)/$65,800 (20% down)
Income Requirement: $94,000 (income = home price/3.5)/$75,000 (income = mortgage/3.5)
Monthly Nut: $ 2,400 (FHA)/$2,000 (20% down)
Description: * * * Complete Remodle * * * Reduced price for quick sale. .. This beautiful one bedroom condominium is turn key and ready to move-in. New gourmet kitchen with top of the line stainless steel appliances, custom cabinets, granite counter top and custom lighting. The dinning room features custom cabinets finished with granite counters. The newly remodeled bathroom features a beautiful shower with travertine and marble design enclosed with custom glass door, the new bath tub is surrounded with custom tile and marble, the vanity has a marble counter top and glass bowl sink. This home has new lighting, new paint, new base boards, new windows, new carpet, new tile floors and much much more.

"Remodle"?

"Dinning"?

Although the realtor they chose is obviously an illiterate dummy, the sellers at least seem to possess some common sense. I say that because they have demonstrated a willingness to meaningfully slash the price in a short amount of time:

Jun 27, 2010 - Price Changed $329,000
Jun 18, 2010 - Price Changed $349,000
Jun 01, 2010 - Listed $379,000

Aggressive!

Besides hinting at a determination to get it sold, all that $50,000 in price reductions (in four weeks!) really tells us is that this joint was $50,000 overpriced. You have to be aggressive when you start out with a WTF $379,000 asking price.

DUDE, IT'S A ONE-BEDROOM APARTMENT.

You must be pals with this moron.

So, given how effortless it was for this seller to lop off so much "value," how do we know this place isn't still 50k overpriced? Fundamentals, my friends, fundamentals.

The income requirement of $94,000 seems high, even for this area, but if you calculate the less conservative 3.5 times mortgage (and not 3.5 times price), $75,000 per year seems totally feasible. And Southern California buyers are clearly not conservative when it comes to home ownership, so I'd say that fundamental has been met.

Interestingly, there are no sold comps for reference. Not a single 1 bed/1 bath has sold in this area during the last six months. So we have to fall back on Rent vs. Buy. With 20% down, your monthly nut will be $2,000. I seriously doubt this place, as nice as it is, could get more than $1,400 in rent. Not without a direct ocean view.

Which means if the going got rough and you had to relocate for work but couldn't sell (thanks to hefty sales commissions and the likelihood that appreciation is dead for the next few years), you would eat, at a minimum, $600 a month just to keep this "investment" and maintain your FICO score.

Yikes. I hope that new job pays a lot more than your last gig.

Worse, if a buyer goes FHA (which, let's be honest, is exactly what's going to happen) then the monthly outflow jumps to nearly $2,400!

FOR A ONE-BEDROOM APARTMENT.

So, clearly that fundamental has not been met because (debt)ownership entails a $1,000 monthly premium over renting. Yes, yes, the mortgage interest deduction will somewhat narrow that margin (you'd still paying [EDIT: at least] $400 per month more to own even after the tax write-off), but as an owner you need to factor in the likelihood of future tax increases and HOA assessments on a 50-year-old building, and as a landlord you need to factor in vacancy rates and repairs. That's why I think the only reason to buy a one-bedroom is when it's cheaper to own than rent. Period.

Because one-bedrooms are shitty investments to begin with. Compared to a two-bedroom, the rental options are incredibly limited. Either you rent to a retiree or a single professional. That's about it. Students are out because very few can afford to live without roommates. Families are out because one-bedrooms are too small for couples with a kid.

But one-bedrooms are even worse investments when they are upgraded units like this. That's because you need to charge more rent to cover your inflated monthly nut. Which puts you further into the shallow end of the renter pool.

Making matters worse, even if you find a wealthy retiree or cash-flush single (or childless couple without personal-space needs), you're going to have a difficult time keeping them. The retiree is either going to kick the bucket or get sent to a nursing home eventually, and a young single professional is likely to meet someone and get nagged out of the "bachelor pad" and into a house.

High turnover rate is death by a thousand cuts for landlords.

And as spacious and gorgeous as this place is, there's no way you -- or anyone -- will live here for the next 30 years. Which leaves you with two options: Sell for a higher price in 3-5 years, or rent it out for more than the monthly nut.

At this price it would obviously be insanely cashflow negative, leaving only the option to use it as a starter platform and try to sell in a few years for a profit, allowing you to move up into a larger property. Since you'll be paying up to $2,400 each month to live here, you certainly won't be able to save much -- meaning you are betting the farm that rampant appreciation will save you.

And what do you think the odds are that a ONE-BEDROOM APARTMENT will appreciate enough during the next five years to cover your 6% sales commissions and provide enough profit to leverage up into another place?

Infinitesimally small, Chachi.

You see, the disadvantages landlords face in renting out one-bedrooms are the same issues owners face when looking to sell and move up. Who are you going to sell to? That same narrow field of buyers: Well-heeled singles and retirees. Which is why one-bedrooms typically don't appreciate in price as quickly.

Most people don't think about this stuff, but they should.

It's worth noting that the taxable value is $121,947, indicating this is a long-term owner with tons of equity. Which explains the aggressive pricing. And the seller's equity rich status could provide an opportunity for a good negotiator to get a decent price ($280,000 sounds about right for this location). It's not like you'd have to put any money into the thing -- it's fully upgraded and pristine.

Oh, but what's this? No mention of a washer and dryer?

Uh oh. I smell a deal killer.

After poring over the listing details and photos, any mention of in-unit laundry is conspicuously missing.

So let me get this straight: I'm going to pay $2,400 per month for a FOR A ONE-BEDROOM APARTMENT, including a whopping $300 per month in HOA fees, and I have to deal with the colossal pain in the ass known as community laundry?

I rescind my $280,000 target price. The inconvenience of coin-operated community laundry is a huge penalty. And I realize my life is privileged when my biggest concern is avoiding the indignity of having my Brooks Brothers dress shirts dumped on the counter because I left them in the community dryer four minutes too long, but we're talking about shelling out TWO THOUSAND FOUR HUNDRED DOLLARS PER MONTH and having to deal with that bullshit.

For that kind of money, FOR A ONE-BEDROOM APARTMENT, I expect to have a plethora of amenities, the least of which is my own goddamn washer and dryer.

And what was this seller thinking dumping $40,000 to $50,000 into creating a "luxury" unit if the building itself doesn't have any comparable "luxury" features (no pool, no gym -- I wonder if it even has elevators)?

That's like hiring Rolls Royce to install a hand-stitched Corinthian leather interior complete with champagne cooler and suede headliner...in a rusted-out Edsel with manual windows and no engine.

What's the point?

Flouting Flipping Fundamentals

754 CHERRY, Long Beach, CA 90813
Asking Price: $384,900
Beds: 3
Baths: 1
Sq. Ft.: 1,400
$/Sq. Ft.: $275
Lot Size: 6,750 Sq. Ft.
Year Built: 1920
MLS#: P743611
On Redfin: 31 days
Down Payment: $15,400 FHA
Income Requirement: $105,600
Monthly Nut: $2,400
Description: WOW AGENTS SHOW YOUR BUYERS THIS REMODELED HOME. KITCHEN HAS NEW MAPLE CABINETS, NEW GRANITE COUNTER TOPS, NEW TILE FLOOR, NEW MICROWAVE, NEW STOVE, NEW DISHWASHER, NEW GARBAGE DISPOSAL, NEW SINK AND FAUCET, NEW GRANITE ON BREAKFAST BAR, NEW CABINETS AND TILE FLOOR IN PANTRY. NEW TILE IN HUGE SEPARATE DINING ROOM. BATHROOM HAS NEW TUB, NEW TILE IN SHOWER, NEW FLOOR TILE, NEW SINK AND VANITY. BRAND NEW CUSTOM CARPET, NEW CUSTOM PAINT, NEW HEATER, NEW WINDOWS, CROWN MOLDING IN THE GREAT ROOM, NEW FRENCH DOOR IN GREAT ROOM, NEW INTERIOR DOORS. NEW GARAGE DOOR ON THE TWO CAR GARAGE, NEW SPRINKLERS FRONT AND BACK KEEP THE NEW GRASS NICE AND GREEN. NEW GATE AND FENCING, LONG DRIVEWAY FOR MANY CARS AND HUGE CONCRETE AREA FOR RV/BOAT. MANY FRUIT TREES AND LARGE LOT HAS TWO SEPERATE GRASS AREAS FOR THE KIDS AND ENTERTAINNG. HUGE FRONT PORCH ON THIS CRAFTSMAN STYLE HOME. BRING YOUR FHA BUYERS, WE WILL AND CAN WORK WITH THEM.

"SEPERATE"?

"ENTERTAINNG"?

This illiterate CAPS LOCK fan purchased this craftsman in June for $275,000 and after sprucing it up with some standard flipper fare, slapped it on the market $399,000.

After a month of being laughed at for his ridiculous attempt to extract $125,000 for his "services," he sheepishly lowered the price by $15,000.

And here we sit. On the wrong side of 7th Street. Trying to snatch $110,000 for about $25,000 in upgrades.



I actually think this is a nice little house. But the real question is whether it is priced correctly for this post-Super Summer Selling Season(tm) market. To answer that, we'll need to look at a few fundamentals:

The sold comps are all over the place, and some even justify the asking price. However, he can't escape from 571 Cherry, which is on the good side of 7th and sold for a mere $309,000 just last month. It may not be quite as nice, but I imagine with the $70,000 saved you could make some incredibly nice improvements. Ruling: Overpriced.

This guy is asking $275 per square foot, whereas the average Sold price per square for this neighborhood is about $180. Ruling: Overpriced.

The income requirement, which is calculated at a generous Loan Amount/3.5, is $105,600, whereas the median income in 90813 is -- are you ready for this? -- a whopping $27,375. So for someone living to realistically afford this place, they would need to make FOUR TIMES the local annual income. Ruling: Stunningly overpriced.

On the other hand, here is what it looked like before:
WOOF.

In that context, I can sort of see why he's priced so high. It looks like a piece of fine art compared to its pre-flip state.

But the fundamental goal in flipping is to get in and get out -- quickly. Given that the seasonally slow months in residential real estate are fast approaching, he's taking an awfully big gamble by sticking to what appears to be a woefully optimistic price.

Especially considering these facts:

1) This is a low-income neighborhood, and people making the required $100,000 will be difficult to come by;
2) It's right on top of one of the busiest thoroughfares in Long Beach; and
3) The property is next door to a very big (and very pink) apartment building.

Well, time will tell. But time is also of the essence in the flipping business.

Tick tock, buddy.

A BEAUTIFUL BUNGALOW BUNGLED?: UPDATE II

Thanks to our pal Morekaos for keeping us up to date on this property.

The price was "$729,000" and changed to "$699,999"

After more than a year and a half on the market, this is way too little, way too late. It's been wearing the scarlet "S" of Stale-Ass Listings for quite some time now, and this piss-ant 4% price reduction isn't going to get them anywhere.

Given that (his second) Super Summer Selling Season(tm) is quickly coming to an end, I guess he'll just have to wait until next summer in the hopes that easy-money, $0-down loans have made a major comeback by then.

Of note, the listing still says, "PRICED TO SELL!!!" He's serious this time, folks! Now he really means it! Scout's honor!

It's worth noting that this asking price is rapidly approaching his 2004 purchase price. Yikes.

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

Our pal Morekaos dropped by to inform us that 219 Belmont is back on the market...this time with a stunning $100,000 price reduction.

This idiot has been chasing the market down since January 2009 with no luck. He's praying to the high heavens that the current $749,000 ask will get the job done, but that's where it should have been priced last year. Although $384 per square foot is reasonable, you're a little late to the party, dummy.

And, although you're sporting a new price, your realtard is still sporting the same ALL-CAPS listing description. In fact, it still says "PRICED TO SELL!!!" Um, you also said that when it was priced at $849,000 in October.

So, if it was supposedly "PRICED TO SELL!!!" at $849,000 but was summarily IGNORED by the buying public, with your obvious lack of real estate accumen and glaring inability to compute simple numbers and determine when something is woefully overpriced for the current market, just why should anyone trust you that this time -- really guys, I swear, no joke, I'm serious now, mulligan! -- it's really, truly "PRICED TO SELL!!!" at $749,000?

The answer is: They shouldn't trust you. Because you clearly have no idea what you're doing.

My advice is to find different work, because every day you spend in this (dying) profession is just another 24 hours you look like a total dumbass.

And not to pile on (okay, okay...to pile on) it's worth noting that this little-r realtor still hasn't fixed the "SEPERATE" typo. Heckuva job, dipshit! You're a real pro!

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


Hi puppy!

219 Belmont Ave, 90803
Price: $849,000
Beds: 3
Baths: 2
Sq. Ft.: 1,950
$/Sq. Ft.: $435
Lot Size: 6,150 Sq. Ft.
Year Built: 1920
MLS#: P705713
On Redfin: 270 days
Down Payment: $169,800
Income Requirement: $243,000
Monthly Nut: $4,700 - $5,100 (depending on financing)
Description: PRICED TO SELL!!! REDUCED $80,000!! THIS BEAUTIFUL CALIFORNIA BUNGALOW IS A MUST SEE! COMPLETELY REFURBISHED BOTH INSIDE AND OUT, WITH ORIGINAL BUNGALOW CHARM KEPT INTACT. ORIGINAL HARDWOOD FLOORS THROUGHOUT, REFINISHED TO PROTECT THEIR TIMELESS BEAUTY. FRONT & BACK YARDS NEWLY LANDSCAPED, W/LARGE BACKYARD INCLUDING SPACIOUS WOOD DECK. OPEN FLOOR PLAN WITH LARGE WINDOWS AND NATURAL SUNLIGHT. 3RD BEDROOM FEATURES FIREPLACE AND FRENCH DOORS OUT TO GARDEN, CAN BE USED AS MOTHER-IN-LAW UNIT W/SEPERATE ENTRANCE (HAS OWN GAS & WATER HOOKUPS). DEVELOPMENT OPPORTUNITIES INCLUDE BUILDING 2ND STORY FOR LARGER HOME OR ADDTL INCOME UNIT (R2 LOT). RECENT UPGRADES INCLUDE NEW ROOF WITHIN 12 MONTHS, NEW INSIDE PAINT. WALKING DISTANCE TO 2ND STREET WITH AMAZING RESTAURANTS AND SHOPPING, 2 BLOCKS TO BEACH. OCEAN VIEW FROM FRONT OF PROPERTY. WARM, FRIENDLY NEIGHBORHOOD NEAR EXCELLENT SCHOOLS.

"SEPERATE"?

WHY, OH WHY DO YOU PEOPLE INSIST ON WRITING IN ALL CAPS? SERIOUSLY, SOMEONE EXPLAIN IT TO ME. MAYBE THERE IS A LEGITIMATE REASON, THAT ONCE BROUGHT TO LIGHT, WILL FOREVER CONVINCE ME THAT THIS HAS A PURPOSE OTHER THAN ANNOYING THE LIVING, BREATHING SHIT OUT OF ME.

THIS HOUSE IS FREAKING SWEET. I AM HARD PRESSED TO FIND ANY MAJOR FLAWS WITH IT. IT'S BIG (FOR BELMONT HEIGHTS), HAS MASSIVE CURB APPEAL AND A CUTE LITTLE YARD, AND IS IN A KILLER NEIGHBORHOOD.

BUT HE ACTUALLY EXPECTS US TO BE IMPRESSED WITH THIS PROCLAMATION: "REDUCED $80,000!!"

HEY SHIT HEEL, ALL THAT MEANS IS THAT YOU WERE $80,000 OVERPRICED. CONGRATULATIONS ON BEING A TURD-BURGLING GREEDHEAD--AND HAPPILY IDENTIFYING YOURSELF AS SUCH TO THE REST OF THE WORLD.

HEY, YOU KNOW WHAT'S "PRICED TO SELL!!!"? A HOUSE THAT FUCKING SELLS.
IT MAKES YOU WONDER: IF "850,000 IS "PRICED TO SELL," AND HE WAS RECENTLY PRICED AT A WALLET-NUKING $930,000...THEN JUST HOW WTF WAS HIS INITIAL ASKING PRICE TO EARN HIM THESE LAST 270 DAYS ON THE MARKET? $3 MILLION? 10?

IT DOESN'T MATTER. THE FACT IS, THIS DUDE WITH THE SWEET HOUSE AND THE BAD ASS DOG ON THE LAWN HAS BEEN GINGERLY REDUCING THE PRICE FOR ALMOST A YEAR TO NO AVAIL. SO, AFTER THIS LATEST $80,000 REDUCTION, SHOULD HE PLACE A CALL TO U-HAUL AND INVEST IN SOME CORRUGATED BOXES?

UH, MAYBE?

LET'S NOT FORGET HOW AWESOME THIS NEIGHBORHOOD IS. AND ALTHOUGH THE PROPERTY FEATURES A SMALL, SO-SO KITCHEN, THIS PLACE IS CHARMING AND THREE BEDS AND 2,000 SQUARE FEET IN THE HEIGHTS IS HIGHLY DESIRABLE.

ONE LOOK AT THE PRICING HISTORY...

Oct 03, 2009 - Listed $849,000
Sep 12, 2009 - Delisted
May 07, 2009 - Price Changed
Mar 04, 2009 - Price Changed
Jan 14, 2009 - Price Changed
Jan 13, 2009 - Listed
Apr 30, 2004 - Sold $635,000

...AND IT'S CLEAR THAT IF HE GETS AGGRESSIVE (AND DEPENDING ON HOW MUCH HE DUMPED INTO THOSE MILD UPGRADES--WHICH DOESN'T APPEAR TO BE THAT MUCH) HE WILL NOT ONLY GET OUT OF THIS ALIVE, BUT WILL WALK WITH A BIT OF PROFIT IN A BRUTAL MARKET WHERE MOST LONG BEACH SELLERS THAT BOUGHT A FEW YEARS AGO ARE LOSING THEIR SHIRTS (AND PANTS AND SOCKS AND HATS AND ANKLE WEIGHTS AND SHOE HORNS...).

AND THAT'S BECAUSE HE BOUGHT SMART IN '04.

NOW HE JUST NEEDS TO SELL SMART IN '09.

GET OUT WHILE YOU CAN STILL COMMAND A PREMIUM, PAL. KNOCKING ANOTHER $80,000 OFF MIGHT START A BIDDING WAR, OR, WHO KNOWS, IT MIGHT JUST LEAD TO YET ANOTHER PRICE REDUCTION AS FALL REARS ITS UGLY HEAD, CASH BUYERS DRY UP, INVENTORY INCREASES, AND JUMBO FINANCING CONTINUES ITS GRADUAL RESTRICTION.

ALL WE KNOW IS SO FAR $850,000 HASN'T BEEN ENOUGH TO GARNER INTEREST. IT CERTAINLY DOESN'T HELP THAT THE ONLY NEARBY PROPERTY THAT HAS SOLD DURING THE LAST SIX MONTHS FOR ANYWHERE CLOSE TO THIS PRICE WAS IN JUNE--AND SPORTED AN EXTRA 200 EXTRA SQUARE FEET.

BUT I REALLY LIKE THIS PROPERTY AND WILL OWN A HOUSE LIKE THIS IN THE FUTURE, SO I'M ROOTING FOR HIM.

DO YOU HEAR ME??? I'M ROOTING FOR YOU AND HOPE YOU FIND A BUYER!!! OTHERWISE I FEAR YOU'LL KEEP HANGING ON TO THAT DUSTY OLD DREAM OF "SPECIALNESS" AND ENTITLEMENT TO BUBBLE PROFITS AND MISS YOUR OPPORTUNITY TO SELL WITHOUT BRINGING YOUR CHECKBOOK TO THE BARGAINING TABLE!!!

GET IN THE GAME, BUDDY!!!

Tightfisted on Vista

3608 East VISTA St, Long Beach, CA 90803
Asking Price: $689,000
Beds: 2
Baths: 1
Sq. Ft.: 1,038
$/Sq. Ft.: $664
Lot Size: 3,150 Sq. Ft.
Year Built: 1922
Community: Belmont Heights/Alamitos Heights
MLS#: S625650
On Redfin: 21 days
Down Payment: $137,800
Income Requirement: $157,000 (3.5x mortgage)
Monthly Nut: $3,600
Description: Absolutely Gorgeous Belmont Heights Home! Beautifully renovated throughout and includes a spacious sunlit living room with crackling fireplace, gourmet kitchen with custom cabinetry, Viking stove & inviting dining area, plus an adorable updated bathroom. Also features a private backyard retreat area, an oversized detached 1 car garage, updated electrical, copper plumbing & a tankless water heater. This home is stunning and truly a Must See!

In March of 2005, when the bubble was steadily inflating like Lindsay Lohan's lips, this property was picked up for $620,000.

And considering the bubble continued to inflate well into 2006, the owner was probably feeling pretty cocksure of his investment and was anticipating endless riches when he sold "in a few years."

Unfortunately for this guy, by the time "a few years" rolled around, the residential real estate market had shit the bed and his paper gains had been completely wiped out. And despite the fact that most Long Beach properties are selling for 2003 prices and lower, depending on area and condition, this owner -- now a desperate seller -- believes his property is unique like a fingerprint or a snowflake and deserves to sell for 10% above his 2005 purchase price.

HAHAHAHAHAHAHAHA. Bonne chance with that, dummy.

Let's take a closer look and see why he believes this place should defy market realities:

Mehhhhhhh.

This place looks alright I guess. It's kind of funky, obviously quite small, has decent hardwoods...but features nothing that knocks my socks off for this kind of loot. If I'm shelling out this kind of dough, I expect stone countertops at a minimum.

And for $664 per square foot, I expect the (one and only) bathroom to be super impressive.


Yeah, not so much. And check out how much the door impedes into the space! That bathroom is tiny! Me and my (future) wife getting ready at the same time would be a hoot!

And although it's kind of neat having the (incredibly cramped) bedroom open up into the backyard, it also makes this property seem more like a back-house rental than a real house.

To each his own, I suppose. But on the planet I inhabit, a small family (like, Smurf-small) paying nearly $700,000 for something this shoddy and slapdash -- especially considering it's right on the street and not tucked back into the neighborhood -- doesn't make any sense.

I simply don't see, given the presentation, how this thing is worth any more than $525,000.

First of all, it's no mystery that there is a lot of seller optimism out there right now. In fact, sellers' faith in their absurd wishing prices as the last gasps of the Super Summer Selling Season(tm) sputter out, is nicely illustrated by the following chart:

That wild divergence between sellers' expectations and sales reality says a lot. That's a nearly $100 per square foot difference! WTF?! Regardless of batshit sellers' expectations, the sold average price per square for this neighborhood is $450 -- meaning this seller is asking a $200+ per square premium.

Which begs the question, for what?! Has this guy even seen his listing photos?

Second, the sold comps simply don't support this asking price. The most expensive sale during the last six months was 3835 East 5th St. for $630,000 and it is larger, on a lot DOUBLE the size of our seller's, and actually has stone countertops.

Third, even the ever-optimistic Zillow.com can't support this wild-ass price:

Zillow: $382,875 (low); $510,500 (estimate); $576,865 (high)

You don't even want to know what the other auto-appraisers put this thing at. And it's notable that the hopium-smoking Zillow says the "high" is $576k. The "high" estimates, much like Kelly Blue Book, are reserved for truly pristine and highly upgraded properties. One look at the hodgepodge upgrades and you know this property doesn't approach that vaunted status.

So you really have to wonder what this guy is thinking with his sky-high $689,000 asking price (besides, "I absolutely deserve to get out for break-even.")

But after scouring the listing, I got a little more insight into what kind of seller we're dealing with:

"Exclusions: Fountain in backyard, pot rack and small plasma tv in kitchen"

Really, you cheap fuck? You're such penny pinching miser that you'd rather leave gaping holes in your kitchen drywall than part with a 13-inch TV?

And you're taking your pot rack? That's worth, what, $80?

You going to take the light fixtures with you too, you pathetic tightwad? How about the roof tiles over the guest bedroom?

Folks, I'm going to go out on a limb here and say this cheapskate won't be willing to negotiate on the price. Just a hunch.

Anybody acting like such a little bitch about meaningless shit is clearly delusional and believes he, and his house, are "special." Add to that a wishing price so far out of line with comps and obviously intended to get him to break-even, and we're dealing with someone who won't, and likely can't, take the ego hit required to sell this tiny house.

HELOC Happiness: UPDATE (that was fast)

Morekaos wrote: "Dropped below $500m this morning...ouch!!"

The price was "$540,000" and changed to "$499,000"

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


Asking Price: $540,000
204 North LA VERNE Ave, Long Beach, CA 90803
Beds: 2
Baths: 1
Sq. Ft.: 920
$/Sq. Ft.: $587
Lot Size: 2,400 Sq. Ft.
Year Built: 1926
MLS#: P742241
On Redfin: 23 days
Down Payment: $108,000 (20% conventional)/$21,600 (FHA)
Income Requirement: $123,000 (3.5x mortgage)/$154,000 (3.5x home price)
Monthly Nut: $2,900 (conventional @ 5%)/$3,300 (FHA)
Description: Belmont Shore Classic 1926 Spanish Revival, 2 bed, 1 bath, Garage and 1/2. The subject is in great shape compared to most in the area. A must see if you want a more authentic 1920's Shore home. Features updated gas fireplace, updated bathroom and kitchen, newer roll up garage door. Property has a service porch which adds aprox. 20 sqft. Great ally access for ez drop off of grocery's, etc. A must see before purchasing another similar property in the shore. Great Beach home for resort living in Belmont Shore and just steps away from locally world famous Second Street Shops and restaurants.

There's not enough time in the day to pick apart that woefully idiotic and borderline illiterate description. How exactly can something be "locally world famous"?

That line alone ought to give you an idea of what we're dealing with here.

In the summer of 1997, near the bottom of the last housing cycle, this "subject" was purchased for $220,000. You'll notice that despite a current asking price nearly two-and-a-half times the purchase price, this is a short sale.

As you know, I don't often feature short sales because they are a complete waste of everyone's time. The bank, the second lien-holder, the listing agent, and, of course, the buyer and their agent. However, this one was worth posting because it so perfectly encapsulates the greed and madness of The Great Housing Bubble.

You see, the short sale status means this dipshit (or genius?) racked up more than THREE HUNDRED THOUSAND DOLLARS in HELOC loans, seconds loans, and cash-out refinances. The worst part? Not a dime of that money went into the property:




WOOF.

Oh, but it has a "newer" garage door.

And what a beaut!

So if none of that bubble cash went into improvements and upgrades, just exactly where did it go? Up his nose? In his vein? Beanie Babies?

Just how in the fuck do you burn through $320,000?

Well I guess that's one way.

From a big-picture perspective, it's the most pathetic thing in the world that a tiny, shitty, horribly located, terribly outdated crap shack in Belmont Shore will still run a young couple (sorry, no room for babies, and too expensive for singles) more than half a million dollars.

Yeah, yeah...they're not making any more land, real estate is local, BS is highly desirable. I get it. My point is, forget all that happy horseshit for a minute and look at this place.

Just look at it.

This infested dump -- in a fucking alley -- is what $3,000 per month gets you.

Yeah, I guess it's cool to have "ally" access, but guess who also has "ally" access? EVERYFUCKINGBODY ELSE IN LONG BEACH.

Check out the Aerial View to see what I'm talking about. Holy shit!

Can you imagine the incessant car noise? And the pestilent smell of The Shore House grease traps? Yikes!

And you know what? Some wide-eyed buyer will probably pay close to asking price for this thing. "A bungalow in the Shore for under $550,000? What a steal!"

Sadly, I understand the mentality of the sucker who ends up buying this property. I really do.

Inventory is dried up (let's be honest, that "tsunami" of new supply will never hit as long as banks are actively encouraged to keep distressed assets off the books), rates are insanely low (and Americans don't care about anything except "what's the monthly payment?"), and people who got priced out or opted out of the bubble have seen some massive declines and are straight up tired of waiting (I've personally been waiting four years to buy a place. It's getting old).

Hell, man, at a certain point people just need to get on with their lives. Even if that means buying a house knowing full-well that it will continue to lose value.

So, although I think this piece of shit is way overpriced for what you get, it's likely being viewed as a prime opportunity for a young, well-heeled couple to finally get into Belmont Shore after years of putting their lives on hold.

If this place was actually for sale, I bet it would go pending in no time.

How About a 50% Haircut?

455 East OCEAN Blvd #1104, Long Beach, CA 90802
Beds: 1
Baths: 1
Sq. Ft.: 664
$/Sq. Ft.: $248
Year Built: 1923
Community: Downtown Area/Alamitos Beach
County: Los Angeles
MLS#: P728984
On Redfin: 123 days
Description: Adorable 1 bed 1 bath condo on the 11 floor really cute kitchen, lots of storage, well laid out floor plan for the sq. footage, light and bright, shared balcony with a view of the Marina and the water. Located on the west side of the building overlooking the courtyard and the fountain. MUST SEE!

Ready for the money shot?

Purchase Price (9/2005): $330,000
Current Asking Price: $165,000
_________________
Loss Assuming Sale: $165,000

OUCH.

And considering the HOA fine is $300 per month and there's no parking, it would need another 50% reduction before I'd consider it.

HELOC Happiness

Asking Price: $540,000
204 North LA VERNE Ave, Long Beach, CA 90803
Beds: 2
Baths: 1
Sq. Ft.: 920
$/Sq. Ft.: $587
Lot Size: 2,400 Sq. Ft.
Year Built: 1926
MLS#: P742241
On Redfin: 23 days
Down Payment: $108,000 (20% conventional)/$21,600 (FHA)
Income Requirement: $123,000 (3.5x mortgage)/$154,000 (3.5x home price)
Monthly Nut: $2,900 (conventional @ 5%)/$3,300 (FHA)
Description: Belmont Shore Classic 1926 Spanish Revival, 2 bed, 1 bath, Garage and 1/2. The subject is in great shape compared to most in the area. A must see if you want a more authentic 1920's Shore home. Features updated gas fireplace, updated bathroom and kitchen, newer roll up garage door. Property has a service porch which adds aprox. 20 sqft. Great ally access for ez drop off of grocery's, etc. A must see before purchasing another similar property in the shore. Great Beach home for resort living in Belmont Shore and just steps away from locally world famous Second Street Shops and restaurants.

There's not enough time in the day to pick apart that woefully idiotic and borderline illiterate description. How exactly can something be "locally world famous"?

That line alone ought to give you an idea of what we're dealing with here.

In the summer of 1997, near the bottom of the last housing cycle, this "subject" was purchased for $220,000. You'll notice that despite a current asking price nearly two-and-a-half times the purchase price, this is a short sale.

As you know, I don't often feature short sales because they are a complete waste of everyone's time. The bank, the second lien-holder, the listing agent, and, of course, the buyer and their agent. However, this one was worth posting because it so perfectly encapsulates the greed and madness of The Great Housing Bubble.

You see, the short sale status means this dipshit (or genius?) racked up more than THREE HUNDRED THOUSAND DOLLARS in HELOC loans, seconds loans, and cash-out refinances. The worst part? Not a dime of that money went into the property:




WOOF.

Oh, but it has a "newer" garage door.

And what a beaut!

So if none of that bubble cash went into improvements and upgrades, just exactly where did it go? Up his nose? In his vein? Beanie Babies?

Just how in the fuck do you burn through $320,000?

Well I guess that's one way.

From a big-picture perspective, it's the most pathetic thing in the world that a tiny, shitty, horribly located, terribly outdated crap shack in Belmont Shore will still run a young couple (sorry, no room for babies, and too expensive for singles) more than half a million dollars.

Yeah, yeah...they're not making any more land, real estate is local, BS is highly desirable. I get it. My point is, forget all that happy horseshit for a minute and look at this place.

Just look at it.

This infested dump -- in a fucking alley -- is what $3,000 per month gets you.

Yeah, I guess it's cool to have "ally" access, but guess who also has "ally" access? EVERYFUCKINGBODY ELSE IN LONG BEACH.

Check out the Aerial View to see what I'm talking about. Holy shit!

Can you imagine the incessant car noise? And the pestilent smell of The Shore House grease traps? Yikes!

And you know what? Some wide-eyed buyer will probably pay close to asking price for this thing. "A bungalow in the Shore for under $550,000? What a steal!"

Sadly, I understand the mentality of the sucker who ends up buying this property. I really do.

Inventory is dried up (let's be honest, that "tsunami" of new supply will never hit as long as banks are actively encouraged to keep distressed assets off the books), rates are insanely low (and Americans don't care about anything except "what's the monthly payment?"), and people who got priced out or opted out of the bubble have seen some massive declines and are straight up tired of waiting (I've personally been waiting four years to buy a place. It's getting old).

Hell, man, at a certain point people just need to get on with their lives. Even if that means buying a house knowing full-well that it will continue to lose value.

So, although I think this piece of shit is way overpriced for what you get, it's likely being viewed as a prime opportunity for a young, well-heeled couple to finally get into Belmont Shore after years of putting their lives on hold.

If this place was actually for sale, I bet it would go pending in no time.