The Magically Expanding House: UPDATE

Price changed from $675,000 to $669,500

This is actually the second price reduction in the last four weeks ($30,000 lopped off so far). Will it be enough to for this flipper to make money on his lipstick-on-a-pig makeover?

Well, considering the census bureau reported that homes for sale are currently the lowest they've been since 1967 (yes, you read that correctly), they might find an impatient, frustrated buyer willing to overpay.

For this kind of scratch I think a buyer can do way better, but in this inventory-free environment nothing really surprises me anymore.

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ADDRESS: 4512 East VERMONT St, Long Beach, CA 90814
ASKING PRICE: $699,900
BEDS: 3
BATHS: 2.75
SQ. FT.: 1,500
$/SQ. FT.: $467
LOT SIZE: 4,735 Sq. Ft.
YEAR BUILT: 1948
COMMUNITY: Belmont Heights/Alamitos Heights
MLS#: P772185
ON REDFIN: 4 days
DOWN PAYMENT: $140,000
INCOME REQUIREMENT (3.5x): $160,000
MONTHLY NUT: $3,700
DESCRIPTION: Remodeled 3 bedroom 2 3/4 bath Home with Contemporary Open Floor Plan and New Laminate Floors throughout. Light & Bright Living Room w/ Venetian Plaster Fireplace opens to Formal Dining Room. New Kitchen w/ Granite Counters, Pantry, & Stainless Steel Appliances including Gas Cooktop, Oven, Dishwasher, & Breakfast Bar opens to Dining Area and to spacious Family room which overlooks NEW Wooden deck with view of the Private Peaceful Backyard. Spacious Master Suite with a New Bathroom with custom flooring, Skylight tube, Vanity & oversized shower w/ seamless shower doors. 2 other custom remodeled bathrooms. There are many other NEW features such as Roof, Copper Plumbing, Tankless Water Heater, Ceiling Insulation, 2 Separate Heating systems, Doors, Paint, Top of the line Designer Sinks & Fixtures, Sod, Sprinklers, Drip System, and some Windows. Opportunity Knocks, Don't miss this Gorgeous Belmont Heights Home!!

Hooray For Intermittent Title Case!

Our featured property was purchased last April for $405,000, and now this flipper is trying to get his mitts on the $294,900 in profits he so richly deserves.

Now, to be fair, in 2010 this place was a certified turd pile:

Woof.

But, as with all flippers, the important question is whether this kitchen is worth the nearly $300,000 premium over the probate sale price:

"But El Bee, clearly they did more work than just the kitchen."

Really? Prove it.

Because although the listing description mentions a laundry list of desirable amenities and upgrades, these are the only other photos:

That's right, friends. A $300,000 markup and only four photos in the whole fucking listing.

I mean, how incompetent do you have to be to dump a bunch of money into flipping a property, jack up the price by hundreds of thousands of dollars, boisterously crow about all the upgrades and renovations, and then fail to, you know, actually include pictures of what you're trying to sell?

And please note that for $700,000 you don't even get a goddamn refrigerator. The balls on this guy.

I'm also curious about something I saw in the description from the 2010 probate listing: "Detached garage. Two rooms off garage that were previously used as additional bedroom and study."

So, since the garage is detached, and these two rooms are off the detached garage, does that mean these rooms are detached from the main house?

The reason I ask is because the public records (and the 2010 listing) clearly indicate this house is a 1-bedroom/1-bath spanning only 888 square feet, but the flipper's new listing is a 3/2.75 clocking in at 1,500. How did this house magically sprout an extra 612 squares?

It appears this dude is trying to include the two rooms off the garage in the total square footage. It's worth noting that if you calculated the price per square foot according to legally confirmed figures in the county assessor's records, the current (and relatively palatable) $467 per square foot would jump to a whopping $788! Motive, anyone?

That seems really fishy. If you're thinking of plunking down nearly three-quarters of a million dollars for this place (HAHAHAHAHA), definitely do your homework and ask the right questions.

Assuming the 1,500 square feet is somehow legitimate, I think a minor price reduction will garner a sale. It's on a relatively big lot in a prime area, has a wealth of upgrades (allegedly), and I think a working couple, forced to wait five years for this massive housing bubble to deflate and return prices to reasonable levels, will look around at the dearth of quality Long Beach inventory and simply bite the bullet and overpay for this flip job.

I myself would feel nauseous paying nearly $300,000 for upgrades that cost, at most, $120,000, but that's just me.

UPDATE: Listing photos finally added.

He'll Flip Ya For Real

Today's property is a throwback to the old days when you could buy an apartment for a good price, put a little elbow grease into it, quickly put it back on the market, and walk away with an easy, pocket-bulging profit.

Unfortunately for this dolt, those old days of easy flipping are long gone and buyers know better than to fall prey to the greed-infused motivations of gold-bricking shysters.

ADDRESS: 4301 East 2ND St Unit 3b, Long Beach, CA 90803
WISHING PRICE: $535,000
PURCHASE PRICE: $360,000
OVERLY OPTIMISTIC PROFIT TARGET: $140,000
BEDS: 2
BATHS: 2
SQ. FT.: 1,218
$/SQ. FT.: $439
YEAR BUILT: 1965
COMMUNITY: Belmont Shore/Park/Naples/Marina Pacific/Bay Harbor
MLS#: P757318
DOWN PAYMENT: $107,000
INCOME REQUIREMENT: $122,000/year
MONTHLY NUT (AT 5.05%): $2,900
HOA: $195
DESCRIPTION: Standard sale. Amazing ocean and Cataline views. Stunning end unit. Complete remodel, Kitchen has custom limestone floors, granite countertops, all new Bosch built-in appliances. Beautiful bathrooms with new vanities, counters, tile and fixtures. New carpet throughout. Huge balcony. Low HOA dues. Underground garage. First time on market since new.

Who is Cataline? That chick across the street who watches TV in the nude? Yeah, I guess that is a great selling point.

In addition to a front-row seat to Cataline's exhibitionism, this apartment has some other nice features too -- not the least of which is a killer view of the ocean and Catalina (do you suppose that's what he meant?):

Admit it. That's freaking awesome.

And it looks like a decent amount of effort went into the bathrooms (although it's strange that he would take photos of both Westin-like vanities but none of the showers -- typically the focal point of any renovated bathroom):

But what the hell happened in the kitchen? The appliances and countertops are nice, but those cabinets are cheap-ass builder-grade bullshit.

And the cost-cutting apparently made its way into the bedrooms as well. Check the original closet doors and old-ass aluminum sliding glass doors:

Remember, the asking price is $535,000, making it one of the most expensive listings in a one-mile radius (the most expensive sold comp during the last six months was $499,950). For that kind of loot, you'd better knock buyers' socks off. Instead, we get a half-assed flip.

...and a balcony full of hos:

Er, I mean hose.

What were you expecting?

I guess just like with a flipper's listing description, one little letter can make quite a difference.

And let's talk about the flipper's math for a second. He paid $360,000 in August 2010, spent three months trying to gussy it up, then tacked on a $175,000 premium before dumping it on the MLS.

In Flipperville I'm sure that kind of gouging seems perfectly reasonable, but in the real world the buyers have spoken.

Days on Market: 165

Yeah. Shocker.

I realize he took a risk and should get some profit for his efforts, but it's obvious he didn't put anywhere near $175,000 into improvements. Hell, I'd be surprised if he spent $30k (he didn't even put in the crown molding required in condos demanding premium prices). So this is nothing more than bald-faced greed.

And the worst part? All evidence suggests it has community laundry!

$535,000 and I need to keep a jar full of quarters and be subject to neighbors' passive-aggressive notes about my skivvies being in the dryer too long after they're dry?

Smell ya later, holmes.

So given all the negatives and the mounting evidence that this place is in serious need of a price cut, how can we explain the stubborn insistence on sticking to this wishing price?

"Seller/Owner/Principal Real Estate Licensed"

Oh.

Well then I'm sure he knows what he's doing. After all, he's an "expert."

Super Spring Selling Season® Inventory Update

Sadly, as anyone actively looking for a house can attest, there isn't much to report.

Same old shit, bigger pile.

Here is the November update:

...and the most recent inventory:

Sad. Just further decreases leading up to the (Supposed) Super Spring Selling Season®. Looks like this year is going to be a(nother?) total dud for prospective buyers.

Not only is inventory not ramping up in anticipation of selling season, it's down 4% from January (and down 14.5% from February 2010)!

But the dismal lack of inventory (let alone quality inventory) has only emboldened sellers and their wildly optimistic pricing. Check out the substantial jump in list prices (blue line) during the last few weeks:

ZZZZZZIP!

Yes, I realize a $14 differential between List and Sold prices isn't that dramatic, but you have to compare it to 2010 when the List/Sold tracked within a few bucks.

What's more interesting is how late-2009 buyers -- who listened to the hype about "the bottom is definitely in" and gobbled the free government cheese without stopping to think how all that free first-time homebuyer cash was distorting the market -- now look like total boobs. They happily paid $273 per square foot only to see it drop to $248 just a year-and-a-half later.

That means if 2009 buyers bought a 1,500-square-foot home, they are now -$37,500 underwater. Just like that.

Ouch.

And, to be fair, they're living in a house and reaping tax benefits while I continue to rent and get slaughtered every year at tax time (...and live by the beach, save stacks of money each month, sock away retirement money, get my sink fixed for free, and drive an awesome car...but I'm digressing from my point).

My point is that there are other, largely intangible, reasons for buying a house with total disregard for timing the bottom precisely. I get that. But man, if you bought in '09 you must feel pretty foolish looking at these numbers. You overpaid big time and interest rates haven't changed that much. You would be in a considerably better position had you just exhibited a little patience.

But hey, maybe you don't even look at this stuff anymore. Frankly, that's a blissful ignorance that I'm looking forward to.

But, alas, with each round of bad news my dreams of buying in Long Beach fade even more. I'm just losing enthusiasm. And, as was the case when I started this blog years ago, Orange County provides so much more value for the money. And that has never been more abundantly clear than right now given the piss poor choices in LB. That's not an LA vs. OC thing -- it's just a fact.

I mostly want to buy so I can retire this blog that I love so much and move on with my life. It's no surprise to any loyal reader that I've recently undergone some significant life changes that affect the frequency of new posts. More job responsibility, new writing projects, more focus on friends and family and, of course, the most common impetus for reevaluation and change, heartbreak, have conspired to force The Long Beach Housing Blog to the back burner.

But, I truly miss the excitement of publishing a few posts per week that a bunch of people (some as far away as China and Australia) will read and hopefully get something out of. And of course I always look forward to the insightful, funny, informative comments.

But, alas, life is about stages.

And I sense that RE in the LBC's exit to stage left is fast approaching.