Wednesday, August 4, 2010

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:


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.

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