WOODEN TEETH: FINAL UPDATE

Sold on 02/01/12 - $165,000

At $155 per square foot, that is less than half the original asking price. Way to hold out for top dollar!

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Since there is no new inventory to speak of, out of "Where Are They Now?" curiosity I've been revisiting past Long Beach Housing Blog properties. Although most RE in the LBC victims--ERRR...featured sellers have since pulled their properties after unsuccessfully pursuing insane wishing prices ("Well, I'm not going to just give it away!"), a few deluded soldiers continue marching on.

Like this idiot:

This dreadful piece of doodie is now entering its FOURTH YEAR on the market. The good news is that after more than 1,100 days of wholly ridiculous prices and slack-jawed market chasing, this dolt seems to be finally waking up to reality. To wit:

Jan 05, 2011 Relisted - $223,000 ($210 per square foot)

But take another look at the photos and ask yourself if $223,000 is even that great of a price for this shit hole. Even if it was asking $50,000 -- the 1981 sales price -- I still don't think it's worth it. In addition to the property taxes and insurance, you have to factor in the significant (and mandatory) teardown and rebuilding costs. But look at the shitty lot and horrible neighborhood -- is that really where you want to build your dream home?

Exactly.

Still overpriced.

At this point I'm beginning to wonder if any price would garner a sale.

But, thanks to foreclosure moratoriums and can-kicking HAMP HAFA HARP BARF FART programs, properties like these are about all we've got. Right now in Long Beach we literally have the cream of the crop as far as wildly delusional sellers. The chaff has already been separated from the market and now we're left with the real kooks.

It's like if you took a stadium full of Raiders fans and systematically began whittling them down:

"All fans who have completed high school or college, please leave the stadium."

"Okay, now everyone with a job please head home."

"Anyone with a credit score above 500 please head for the exits."

"All of those without criminal records, please disperse."

Imagine what you'd be left with! That stadium would be the scariest goddamn place on earth. And sometimes I feel like most of the current Long Beach sellers are those scary, unstable nutjobs.

Think about it:

Longtime owners with assets, equity and/or stable, fixed-rate loans (like this guy) don't need to sell, and so they won't. They pull their properties off the market and we never see them again (it may seem like a good thing to get fair-weather sellers off the MLS, but they are sometimes the most willing to deal because they have equity and will still clear a huge profit if they decide to get real).

Most ticking time-bomb mortgages already blew up and went back to the banks, but the few remaining with resetting and recasting mortgages are busy playing the loan-mod, extend-and-pretend lottery. They (like this moron) are most definitely distressed sellers, but they are not really on the market because they will game the system for as long as they can before their loans explode and they moonwalk away (or a miracle buyer bails them out of their foolishness).

As we all know, short sales are not actually for sale -- that inventory is technically on the MLS, but given the length of time it takes for banks to approve short sales (not an accident), you might as well check the "Exclude Short Sales" box on your Redfin searches (I sure as hell do). Short sales are just a way for banks to delay recognizing losses associated with foreclosure and prevent the property from falling apart (keeping a deadbeat in the place is better than letting it sit abandoned) in the meantime. Short sales (like this fool, at 481 days) may technically be on the market, but in reality they have left the stadium.

You can also disregard listings of those who overpaid during the peak but are gainfully employed. They are severely underwater but can still make their mortgage payment if they really stretch themselves. The tell is they ask peak pricing plus exactly enough to cover sales commissions (like this guy or this dummy), or they are juuuuust below their peak purchase price but after a few reductions have been stuck at the same price for months because further cuts would mean writing a big check at closing or becoming a short sale (like this dreamer). These house-poor suckers won't get anywhere near peak pricing, but they have no choice but to hope for a miracle because they're stretched too thin and have absolutely no room to negotiate. They are technically on the MLS, but they, too, have left the stadium.

So really we're left with only a handful buyers who actually intend to, and can (financially speaking) sell, who don't budge on price because they know they're in the power position, and a mob of delusional die hards at 500+ days on market (like this asshole), populating the MLS with their insane wishing prices and demands for nothing short of jackpot-sized prices.

It's a sad state of affairs out there. Realtors I've spoken to believe inventory will start coming back on the market in March (the "seasonal" thing never really made sense to me in SoCal -- sure, in Des Moines I get that people don't want to go house shopping in January, but it's 75 degrees in Long Beach! I would love nothing more than to check out houses on a day like today!). Sure, inventory might pick up in Spring, but the real question is: What types of sellers will they be?


I guess we'll find out.

What are you seeing out there?

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The price was "$299,000" and changed to "$269,000"

Days on Market: 911

NEVER FORGET!

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Well, this is a fun way to start the new year:

The price was "$344,000" and changed to "$299,000"

By the way, this marks the THIRD YEAR on the MLS for this property. There are a lot of notable delusional greedtards in the LBC, but I think this guy, given that he paid $50,000 ages ago yet is still too dumb fucking stupid to price realistically ("I'm not going to just give it away!") and take the money and run, earns the Official RE in the LBC Eternal Shitbird Award:

I think it's especially appropriate given this photo:

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732 N Washington Pl, CA 90813
Price: $344,000
Beds: 2
Baths: 1
Sq. Ft.: 1,064
$/Sq. Ft.: $323
Lot Size: 3,850 Sq. Ft.
Property Type: Single Family Residence
Year Built: 1905
MLS#: S514617
On Redfin: 630 days
Down Payment: $67,000
Income Requirement: $95,000
Monthly PITI: $2,100
Description: HUGE PRICE REDUCTION!!!Historical Craftsman w/loads of charm.Huge Formal LR,original features:hardwood floors,doors & hardware glass & brass doorknobs,kit with 'ice box' cabinetry,mosaic tile counter,coved ceilings,wrap around porch has been enclosed,orig sash windows,light fixtures,french doors.Oversized lot w/alley and street access.'Potters area off kit with washer and dryer hook-ups. Formal Dining room. 1 BR w/original built ins above closet, 2nd BR has double walk in closet. Bath has built in linen cabinet above tub. Tandem gar divided

"HUGE PRICE REDUCTION!!!"

JUDGING BY THE LOOKS OF THIS THING, YOU'RE GONNA NEED A LOT MORE!!!

Sweet mural. GONE!

Sweet kitchen. GONE!

No pics of the one bathroom, so you know what that means...GONE!

This realtor must have graduated from the Shaky McParkinson's School of Photography:



Really? 628 days to fix that shit and your potential buyers still get vertigo from viewing your listing? Clever.

The listing says "No Laundry in Unit" but that there are hook-ups in a "'Potters" area (a euphemism for "out-the-fuck-side"). That must be some kind of mistake.

Because there's no way someone is dumb fucking stupid enough to ask $344,000--nearly TEN TIMES the median income--in this awful neighborhood with no freaking laundry hook-ups in the house.

There's just no way.

Plus, the owners don't have a washer and dryer?! Just the hook-ups? Seriously, who the fuck lives here? The Swiss Family Slobinson?

But hey, at least it's got a "sleeping porch!" After viewing those interior photos, I think I'll take my chances sleeping outside.

This thing doesn't need fixing up, it needs a bulldozer.

This is a perfect candidate for Real Estate Intervention. The owner purchased this 104-year-old lean-to in 1981 for a paltry $50,000 ($47 per square foot, y'all!). In other words, with a 30-year fixed-rate mortgage, this dump should be paid off in a year and a half.

Considering the interest rate was 17.5% in '81, I'm sure this owner refinanced during the last 28 years. But the point is, there have only been three price reductions in nearly two years. Even with refinances they still must have a truckload of equity--why not just cut the price and walk away with stacks of bubble cash?

Nah, forget that. Just keep doing what you're doing. And by "doing what you're doing" I mean napping on your sleeping porch, washing your loincloth in the bird bath, and making drinking water from your pee.

A New Low

Given some of the ridiculous bullshit I've encountered in my house search, I might have to come out of blogging retirement.

ASKING PRICE: $469,900
ADDRESS: 14 5TH Pl, Long Beach, CA 90802
BEDS: 2
BATHS: 2
SQ. FT.: 1,214
$/SQ. FT.: $387
YEAR BUILT: 1953
MLS#: P786112
ON REDFIN: 86 days
HOA: $260
DOWN PAYMENT (20%): $94,000
INCOME REQUIREMENT (3.5 x Income): $107,000
MONTHLY NUT: $2,500
DESCRIPTION: Amazing sweeping ocean views from the main living space of this two bedroom, two bath condo. This secure unit is just steps from the sand and a large communal patio area, perfect for entertaining or watching the 4th of July fireworks. Condo features hardwood floors, updated kitchen, upgraded bathrooms and plantation style shutters. This could be your perfect ocean home.

I looked at this bank-owned condo a few months back and walked away unimpressed. Between the termite damage, filth, poor condition of the kitchen cabinets, darkness of the bathrooms, lack of street parking, community laundry, creaky floors and incredibly wonky layout, I quickly determined there was no way I was plunking down nearly half a million clams for this place.

Apparently I wasn't the only one.

Because after nearly 90 days on market and two price cuts, this thing is still rotting on the MLS. However, while checking out the listing photos I noticed the bank had finally staged the place to make it look more appealing to buyers. My first thought was, Maybe they're finally getting serious about selling!

Hey, not too shabby!

But then I took a closer look:

Something's off about the lines of the sofa and coffee table in relation to the walls...and the light sources aren't matching up with the rest of the -- wait, what the??

That's right, friends: PHOTOSHOPPED FURNITURE.

I mean, if it wasn't so pathetic it'd be hilarious.

Here is the real photo, with the "enhanced" one right below it for comparison:

Man, I have so many questions!

First, how long did it take to draw those shadows from the bar stools? That is some painstaking detail work. Second, where did the furniture and decorations come from? Another listing? A Crate & Barrel ad? Third, did the bank actually pay an outside firm for this cut-and-paste bullshit, or does an in-house Loss Mitigation employee just happen to have a passion for it?

I mean, why waste time with all this silliness? If you really want to sell, just lower the fucking price.

I'm sure the listing agent would say, "It's to show the potential of the space." And I would retort, "This has the potential to make you look like a low-rent, gold-bricking idiot."

The bank, which has already lost at least $200,000, is thinking the killer view will stop the bleeding. But that awesome white-water view is not nearly enough to overcome the dilapidated condition and layout disadvantages of this property.

But hey, instead of investing a few grand into actually repainting, cleaning, and staging the property, why not just waste time, money and effort digitally inserting fake paint, artwork and furniture into a listing photo? TOTALLY MAKES SENSE.

And hell, why stop at just one photo? Might as well go all the way. Here, I'll even supply a few freebies...

This original listing photo makes the bathroom look dark, dank and unwelcoming (um, because it is dark, dank and unwelcoming):

But the new version adds a much needed dose of mold-killing sunlight:

And yuck, look at those beater cars and stinky Port-o-Potty in this photo:

A little digital magic and we've really classed up the neighborhood!

I mean, is this where sellers are now in their quest to deny reality? Do they actually think this is going to have a positive effect on how people perceive a property?

I remember when the housing bubble first popped and people were giving away the brand-new Toyota Highlander in the driveway if you bought their overpriced McMansion. NOBODY FUCKING CARES ABOUT SOME SHITBOX YOU JUST BOUGHT WITH YOUR HELOC -- JUST LOWER THE GODDAMN PRICE!

For the record, if in real life this condo actually resembled the fraudulently altered listing photo, $387 per square foot, given the proximity to the sand, might be approaching a decent deal. But as it stands, I think this place requires entirely too much work to command such a premium price.

But hey, instead of putting in a little work to recoup more money at sales time, I fully support banks and listing agents lazily sprucing up listings with photo editing software. Sure, buyers are going to be bummed out that they were misled, but we will at least get a good laugh.

UPDATE: AN EAGLE-EYED READER SPOTTED THE SAME PHOTOSHOPPED FURNITURE IN ANOTHER LISTING. AMAZING CATCH, ANON!

Please please please let this trend catch on.

Wooden Teeth: UPDATE III

Since there is no new inventory to speak of, out of "Where Are They Now?" curiosity I've been revisiting past Long Beach Housing Blog properties. Although most RE in the LBC victims--ERRR...featured sellers have since pulled their properties after unsuccessfully pursuing insane wishing prices ("Well, I'm not going to just give it away!"), a few deluded soldiers continue marching on.

Like this idiot:

This dreadful piece of doodie is now entering its FOURTH YEAR on the market. The good news is that after more than 1,100 days of wholly ridiculous prices and slack-jawed market chasing, this dolt seems to be finally waking up to reality. To wit:

Jan 05, 2011 Relisted - $223,000 ($210 per square foot)

But take another look at the photos and ask yourself if $223,000 is even that great of a price for this shit hole. Even if it was asking $50,000 -- the 1981 sales price -- I still don't think it's worth it. In addition to the property taxes and insurance, you have to factor in the significant (and mandatory) teardown and rebuilding costs. But look at the shitty lot and horrible neighborhood -- is that really where you want to build your dream home?

Exactly.

Still overpriced.

At this point I'm beginning to wonder if any price would garner a sale.

But, thanks to foreclosure moratoriums and can-kicking HAMP HAFA HARP BARF FART programs, properties like these are about all we've got. Right now in Long Beach we literally have the cream of the crop as far as wildly delusional sellers. The chaff has already been separated from the market and now we're left with the real kooks.

It's like if you took a stadium full of Raiders fans and systematically began whittling them down:

"All fans who have completed high school or college, please leave the stadium."

"Okay, now everyone with a job please head home."

"Anyone with a credit score above 500 please head for the exits."

"All of those without criminal records, please disperse."

Imagine what you'd be left with! That stadium would be the scariest goddamn place on earth. And sometimes I feel like most of the current Long Beach sellers are those scary, unstable nutjobs.

Think about it:

Longtime owners with assets, equity and/or stable, fixed-rate loans (like this guy) don't need to sell, and so they won't. They pull their properties off the market and we never see them again (it may seem like a good thing to get fair-weather sellers off the MLS, but they are sometimes the most willing to deal because they have equity and will still clear a huge profit if they decide to get real).

Most ticking time-bomb mortgages already blew up and went back to the banks, but the few remaining with resetting and recasting mortgages are busy playing the loan-mod, extend-and-pretend lottery. They (like this moron) are most definitely distressed sellers, but they are not really on the market because they will game the system for as long as they can before their loans explode and they moonwalk away (or a miracle buyer bails them out of their foolishness).

As we all know, short sales are not actually for sale -- that inventory is technically on the MLS, but given the length of time it takes for banks to approve short sales (not an accident), you might as well check the "Exclude Short Sales" box on your Redfin searches (I sure as hell do). Short sales are just a way for banks to delay recognizing losses associated with foreclosure and prevent the property from falling apart (keeping a deadbeat in the place is better than letting it sit abandoned) in the meantime. Short sales (like this fool, at 481 days) may technically be on the market, but in reality they have left the stadium.

You can also disregard listings of those who overpaid during the peak but are gainfully employed. They are severely underwater but can still make their mortgage payment if they really stretch themselves. The tell is they ask peak pricing plus exactly enough to cover sales commissions (like this guy or this dummy), or they are juuuuust below their peak purchase price but after a few reductions have been stuck at the same price for months because further cuts would mean writing a big check at closing or becoming a short sale (like this dreamer). These house-poor suckers won't get anywhere near peak pricing, but they have no choice but to hope for a miracle because they're stretched too thin and have absolutely no room to negotiate. They are technically on the MLS, but they, too, have left the stadium.

So really we're left with only a handful buyers who actually intend to, and can (financially speaking) sell, who don't budge on price because they know they're in the power position, and a mob of delusional die hards at 500+ days on market (like this asshole), populating the MLS with their insane wishing prices and demands for nothing short of jackpot-sized prices.

It's a sad state of affairs out there. Realtors I've spoken to believe inventory will start coming back on the market in March (the "seasonal" thing never really made sense to me in SoCal -- sure, in Des Moines I get that people don't want to go house shopping in January, but it's 75 degrees in Long Beach! I would love nothing more than to check out houses on a day like today!). Sure, inventory might pick up in Spring, but the real question is: What types of sellers will they be?


I guess we'll find out.

What are you seeing out there?

+++++++++++++++++++++++++++++++++++
The price was "$299,000" and changed to "$269,000"

Days on Market: 911

NEVER FORGET!

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

Well, this is a fun way to start the new year:

The price was "$344,000" and changed to "$299,000"

By the way, this marks the THIRD YEAR on the MLS for this property. There are a lot of notable delusional greedtards in the LBC, but I think this guy, given that he paid $50,000 ages ago yet is still too dumb fucking stupid to price realistically ("I'm not going to just give it away!") and take the money and run, earns the Official RE in the LBC Eternal Shitbird Award:

I think it's especially appropriate given this photo:

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732 N Washington Pl, CA 90813
Price: $344,000
Beds: 2
Baths: 1
Sq. Ft.: 1,064
$/Sq. Ft.: $323
Lot Size: 3,850 Sq. Ft.
Property Type: Single Family Residence
Year Built: 1905
MLS#: S514617
On Redfin: 630 days
Down Payment: $67,000
Income Requirement: $95,000
Monthly PITI: $2,100
Description: HUGE PRICE REDUCTION!!!Historical Craftsman w/loads of charm.Huge Formal LR,original features:hardwood floors,doors & hardware glass & brass doorknobs,kit with 'ice box' cabinetry,mosaic tile counter,coved ceilings,wrap around porch has been enclosed,orig sash windows,light fixtures,french doors.Oversized lot w/alley and street access.'Potters area off kit with washer and dryer hook-ups. Formal Dining room. 1 BR w/original built ins above closet, 2nd BR has double walk in closet. Bath has built in linen cabinet above tub. Tandem gar divided

"HUGE PRICE REDUCTION!!!"

JUDGING BY THE LOOKS OF THIS THING, YOU'RE GONNA NEED A LOT MORE!!!

Sweet mural. GONE!

Sweet kitchen. GONE!

No pics of the one bathroom, so you know what that means...GONE!

This realtor must have graduated from the Shaky McParkinson's School of Photography:



Really? 628 days to fix that shit and your potential buyers still get vertigo from viewing your listing? Clever.

The listing says "No Laundry in Unit" but that there are hook-ups in a "'Potters" area (a euphemism for "out-the-fuck-side"). That must be some kind of mistake.

Because there's no way someone is dumb fucking stupid enough to ask $344,000--nearly TEN TIMES the median income--in this awful neighborhood with no freaking laundry hook-ups in the house.

There's just no way.

Plus, the owners don't have a washer and dryer?! Just the hook-ups? Seriously, who the fuck lives here? The Swiss Family Slobinson?

But hey, at least it's got a "sleeping porch!" After viewing those interior photos, I think I'll take my chances sleeping outside.

This thing doesn't need fixing up, it needs a bulldozer.

This is a perfect candidate for Real Estate Intervention. The owner purchased this 104-year-old lean-to in 1981 for a paltry $50,000 ($47 per square foot, y'all!). In other words, with a 30-year fixed-rate mortgage, this dump should be paid off in a year and a half.

Considering the interest rate was 17.5% in '81, I'm sure this owner refinanced during the last 28 years. But the point is, there have only been three price reductions in nearly two years. Even with refinances they still must have a truckload of equity--why not just cut the price and walk away with stacks of bubble cash?

Nah, forget that. Just keep doing what you're doing. And by "doing what you're doing" I mean napping on your sleeping porch, washing your loincloth in the bird bath, and making drinking water from your pee.

A Question of Taste: FINAL UPDATE

Sold on 09/01/10 - $440,000

After 15 months on the market (so long they finally gave up and returned the staging furniture -- check out the new listing photos) and 12% in price cuts, they finally found a buyer.

Look, this is a beautifully restored house in a decent neighborhood (I'm being generous...this lower-income, rental-filled 'hood is marginal at best), but this buyer still overpaid. Straight up.

He could have waited a bit longer and saved himself a substantial chunk of loot.

$383 per square foot, although an okay deal on the surface, is at least $120 more per square foot than the going rate in this area. Yes, you have to factor in how the plethora of condos in this rental-inundated area affects the ppsft, but the overall point is that's a rich premium to pay. And it goes back to the aforementioned golden rule of real estate: Buy the crappiest house in the nicest neighborhood.

And look, I get that some people would rather let another jackass spend all of his loot painstakingly restoring their house for them instead of dealing with years of work and contractor headaches themselves (ever heard of Divorce Dust?), but it still doesn't make sense to buy the most expensive property (by a long shot) in a so-so area. Especially when the market is so soft.

And they didn't even get free government cheese!

Looks like the Greater Fool theory is alive and well.

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Address: 1514 E Appleton St, 90802
Asking Price: $499,900
Year Built: 1907
Size: 3 beds, 2 baths, 1,148 sq. ft.
$/Sq. Ft.: $435
Purchase price: $245,000
Purchase date: 7/2001
MLS#: P688269
On Redfin: 9 days
Down Payment: $100,000
Monthly Payment: $2,600
Income Requirement: $143,000
Description: ***A TRULY EXQUISITE 1907 REMODELED VICTORIAN PERIOD HOME **** WITH LOTS OF CHARACTER THIS HOME FEATURES, BEAUTIFUL HARDWOOD FLOORS, CUSTOM PAINTING THROUGHOUT, ABSOLUTELY GORGEOUS REMODELED KITCHEN, NEWER REMODELED BATHROOMS, INSIDE LAUNDRY, TANKLESS WATER HEATER, REMODELED BATHROOMS....WITH A GREAT LOCATION...CLOSE TO BEACH,PARKS,ART MUSEUM,SHOPS & RESTAURANTS. DRIVEWAY FOR 2 CARS, STORAGE UNIT IN REAR YARD.....A TRUE GEM*** A MUST SEE ****

****THESE PEOPLE ARE OUT OF THEIR MINDS IF THEY THINK THEY CAN GET HALF A MILLION FOR THIS THING****

****IT’S SO CLOSE TO “BEACH,PARKS,ART MUSEUM,SHOPS” THAT THERE WAS NO ROOM FOR A SPACE AFTER EACH COMMA****

****WHY PERFORM ALL THAT REMODELING WORK ONLY TO INSTALL GROSS TWO-TONE KITCHEN TILES?....I THINK THEY WOULD HAVE BEEN MUCH BETTER OFF WITH SIMPLE WHITE QUARTZ COUNTERS****
****"NEWER" REMODELED BATHROOMS? IT'S EITHER NEW OR IT'S NOT. WOULD YOU SERVE "FRESH-ISH" SALMON TO YOUR FAMILY? JUST SAY "REMODELED BATHROOMS " AND YOU WON'T HAVE TO ANNOY PEOPLE WITH THAT KIND OF IDIOCY!****

****OH WAIT, YOU DID JUST SAY "REMODELED BATHROOMS" WHEN YOU MENTIONED THE BATHROOMS ONCE AGAIN IN YOUR LISTING DESCRIPTION. YOU PROBABLY MISSED IT BECAUSE YOU WERE TYPING IN ALL CAPS LIKE A 13-YEAR OLD TWITTERING ABOUT MILEY CYRUS' PONYTAILS****

Ugh, I gave myself a headache just writing like that for a few minutes. How do realtors do that all day?

Man, this place is small for the money. And on a matchbook lot.

But the description was correct about one thing: This place has lots of character.

And it has a neat little patio, but why dump all that money into remodeling the house if you're just going to leave that moldy, rotting storage shed as-is? Ugh, what an eyesore.

But kitchen and shit shed notwithstanding, they did an excellent job on the renovations. The mix of original cues and modern updates work pretty well together. I mean, check the original windows mixed in with some recessed lighting:

A faithful restoration like that must make the Long Beach’s Historical Society happy.

Overall, I think this little house looks great and the details are phenomenal.

But, as they (I) say: “One man’s top-notch upgrades and personal style choices mean fuckall to a new buyer.”

The balance between restoration to its original build condition and sensible modernization is great, but most of the details and expense will go unappreciated--or ignored completely--depending on the personal tastes and needs of buyers.

For an example, let's look at classic cars. One of my favorite cars is the 1963 Lincoln Continental convertible. Ideally I’m looking for one with red interior and black (or white) exterior.
And even though this car was built more than a decade before I was born, I want something as original as possible. We’re talking whitewall tires, original hubcaps, original seats, matching motor (anything unseen by the naked eye, such as new, more efficient engine internals are just fine), original radio, etc.

I’m old school like that.

So, while perusing Auto Trader, I find a sweet black Continental with custom wheels, an incredible Pioneer DVD stereo with custom speakers installed throughout. The beautiful leather seats have custom suede inserts, and the black paint--which is the original color--has a subtle ghost flame job. The seller says he bought it for $15,000 and put another $20,000 into customizing it.

Plus, he expects to be reimbursed for the blood sweat and tears he put into the car, so he's asking $40,000.

But he fails to realize that not everyone has his particular (or peculiar) taste or ideas about what a classic car should look like. And some people, like me, would have to spend money tearing out those custom speakers and replacing the interior panels--which have been carved up--with the original pieces.

And the leather and suede upholstery, which he absolutely adores and cost him a pretty penny, isn’t really my thing. I’d have to install the original red vinyl.

The black paint, although faithful to the original factory specs, has a flame job ghosted into it, which obviously isn’t original. I’d have to repaint the entire car to get it back to original shape.

Now, given that he needs to sell his custom Contie to fund his retirement, he wants to get the maximum amount of money out of his “investment.” I, on the other hand, could not possibly care less about how much he spent building a dream car to his liking because we don’t even remotely share similar tastes and, as he's finding out, neither do most buyers.

So I lowball him at $20,000, partially because I smell blood, and partially because it will cost me a decent amount of money to get the car to where I will feel proud to sling it around Long Beach for the next 40 or so years.

Unfortunately for the seller, while the paint was drying on his dream ride, the economy went into the crapper. Suddenly, the classic car market is showing signs of weakness. His fellow Baby Boomers have lost 30-40% of their 401(k)s, and they’re ALL trying to unload their dream cars at the same time. But his fellow soon-to-be-retirees are a lot more desperate than he is, and they’re no longer worried about making a profit on their cars. In fact, they’ve given up the ghost on breaking even on what they’ve put into their rides. Now they’ll take whatever they can get just to get rid of it.

But because the potential buyers of these expensive (and maintenance-hungry) vintage luxury items are starting to lose jobs, there are fewer and fewer people coming around to kick the tires. Furthermore, without the ability to take out HELOC loans against their equity to fund big purchases (like our seller did during the Easy Money Borrowing Bonanza), the prospective buyers can only buy what their income will support. And because the economy is so bad, it’s getting tougher and tougher to get an auto loan for a third car.

So the seller has two choices: He can either capitulate and give it to me for what I offered, or he can accuse me of being a “vulture” and being "unappreciative" of his attention to detail and reject my bid. In his mind, his Continental is “special” and is surely worthy of a premium over the other Lincolns on eBayMotors.

And even if he turns me down now, capitulation will eventually come. As he spends another year or two languishing in the AutoTrader with no bites because he’s still asking a WTF price, he’ll see the market (and financing) for classics like his has tanked even further, and in his desperation he’ll be glad to get $15,000 for his “special” whip.

Finally, once I've taken ownership of this car and restored it back to its original condition, I might find that trends have changed and very few people care about the time and effort I spent making it as original as possible. Maybe the new thing will be whipple charging these things and installing airbags in the suspension. And a buyer with those tastes won't give a rat's rump about my efforts to keep it original.

The similarities to housing are pretty clear: Most buyers don't give a fuck how much that bathtub you love so much cost you. This is their house now, and they hate that tub because they prefer showers.

This seller on Appleton, although he did an excellent and painstaking restoration to his tastes and style, may find that the prospective buyers are interested in customizing it to their own individual tastes--and therefore couldn’t give a steaming shit about how much work and money went into customizing (yes, restoring something to its original condition is “customizing,” just like my Lincoln) it. They’re going to make the house their home and it’s going to cost them money to do so. And that is factored into what their willing to pay.

I'm getting long-winded, I know, but here's another example: One Halloween I went to a house party in LB where the owner had fully customized his garage into a badass man-cave. It had poker and roulette tables, a hand-built bar with kegerator, flat screen TVs, custom lighting and carpeting--it was impressive and probably cost him at least $10,000 in materials plus countless hours designing, painting, and building.

Cool for a visitor, but what about a buyer?

Personally I would much rather be able to protect my cars than play a few hands of Texas Hold ‘Em every other month. That’s just how I roll.

So just how likely do you think it is that I would pay an extra $10,000 (plus money for “time invested”) for his idea of the “perfect” garage?

That's right...ZIPPO.

Anyhow, this is a great house, and if it were in a better area (Belmont Heights) it might have a shot at selling for this asking price.

But a good rule of thumb is to buy the least expensive house in the best neighborhood, not the other way around. And asking $435 per square foot when the average Sold price per square is $200 (hell, the average List price, which is fueled by ferocious delusion and greed, is only just above $300!) makes this the most expensive house in the area by a long shot.

Not to mention a prospective buyer would need to make 4.2 times the median income to reasonably afford this place. I have a feeling those well-heeled buyers would be shopping in more desirable neighborhoods.

And especially when you consider this house sold for $245,000 in 2001, I find it hard to believe they put in $205,000 in upgrades. Because we all know it sure as hell didn’t appreciate that much. Either way, regardless of how much they parted with to renovate this place, they would be lucky to get fifty cents on the dollar in return.

Hat tip to Anonymous for the find!

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.

REOdiculous: FINAL UPDATE

Sold on 7/8/10 - $315,000 ($6,000 above asking price)

As I said in May:

Who knows...maybe the bank has it priced correctly for today's low-inventory, low-interest-rate environment. I think $309,000 is straight up Jocelyn Wildenstein crazy for this shite neighborhood, but given all the manipulation and interference in the market, it's tough to determine the true "value" of anything these days.

...so I'm not terribly surprised by the sales price (especially given the bevy of Fed and State tax incentives that essentially reduced the sales price by $20,000). But I still think the new owner overpaid (dude, burglar bars). Congratulations on purchasing the most expensive house in a one-mile radius!

The good news for the bank is that it recouped some of its money, but the bad news is overall they are still in the hole about $180,000.

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


705 East 8TH St, Long Beach, CA 90813
Asking Price: $309,900
Beds: 2
Baths: 1.5
Sq. Ft.: 1,310
$/Sq. Ft.: $237
Lot Size: 5,000 Sq. Ft.
Year Built: 1918
MLS#: P733349
On Redfin: 2 days
Down Payment: $62,000/$13,000 FHA
Income Requirement: $70,000 (mortgage amount/3.5 = income requirement)
Monthly Nut: $1,700/2,000
Description: CHARMING CRAFTSMAN HOME BLENDS THE NEW WITH THE OLD. ORIGINAL BUILT INS AND WOOD FLOOR PLUS A NEWER BEAUTIFUL REMODELED KITCHEN AND SOME NEWER WINDOWS. THE FRONT PORCH HAS BEEN ENCLOSED FOR A LITTLE EXTRA SQUARE FOOTAGE. THERE IS A LAUNDRY ROOM WITH A DRPO DOWN IRONING BOARD AND 1/2 BATH OFF OF THE KITCHEN. IT SHOWS VERY LIGHT AND BRIGHT. LARGE BACKYARD COMPLETELY FENCED AND ON A CORNER LOT.

What the fuck is a "DRPO"?

About six weeks ago the bank took back this property for $238,169 and is now attempting to gouge buyers--ERRR...earn a substantial profit.

About $70,000 before commissions to be exact.

How does a bank convince itself that despite the fact nobody was willing to pay a paltry $238k ($182 per square foot!) on the courthouse steps, the market will somehow deem a $70,000 markup as a "deal" once it hits the MLS? I'll never understand that one.

Who knows...maybe the bank has it priced correctly for today's low-inventory, low-interest-rate environment. I think $309,000 is straight up Jocelyn Wildenstein crazy for this shite neighborhood, but given all the manipulation and interference in the market, it's tough to determine the true "value" of anything these days.

But let's give it a shot anyway.

Setting aside the obvious implication of the market already determining the value of this property at $238,169, let's look at the pricing history for clues:

May 03, 2010 - Listed $309,900
Mar 15, 2010 - Sold $238,169 (-14.0%/yr)
Sep 15, 2005 - Sold $470,000 (40.9%/yr)
Mar 03, 2005 - Sold $391,000 (10.9%/yr)
Feb 24, 1994 - Sold $125,000

Holy crap! This place once sold for nearly half-a-million dollars?! A year before the peak?!

Wow.

For some perspective, this testament to the idiocy of the Great Housing Bubble sold for a mere $125,000 near the last housing bottom. Now, given, it likely didn't have the upgraded kitchen and look as polished, but this place ain't that nice either (they couldn't even be bothered to upgrade all the windows. But, at least they have burglar bars on them! Bonus!) and it's fair to say it didn't nearly triple in value during the last 16 years.

If we remove the bubble and the crash and extrapolate a generous 4% appreciation rate (which, in this crime-riddled 'hood, is beyond generous) since 1994, today's value would be $234,123.

Hmm...that's weird. That's almost exactly what it sold for at auction -- aka the "value" determined by the market.

How about rent vs. own calculations? I defy you to find a comparable house in this area renting for $1,700 (or $2,000 if the buyer goes FHA, which, let's be honest, is exactly what's going to happen in this neighborhood). Hell, fully restored bungalows near Belmont Heights can barely get $1,700!

Listed comps? This is one of the most expensive listings in the area.

Local incomes? Try $27,375, about a third of what's required to stretch into this mortgage.

My point is, it doesn't take a whole lot of research to figure out this thing is overpriced.

And I realize some people prefer corner lots, but this location looks particularly miserable. This gets the worst of both worlds: A set of stop signs intersecting with a busy, stopless thoroughfare. You get the sounds of squealing brakes and post-stop launches combined with the sounds of cars and trucks hauling ass down 8th. Ugh.

Not to mention the inevitable T-bone accidents caused by the lack of a four-way stop. No thanks.

And click on the Street View and check out the dead grass on the sidewalk. If the city can't even bother to keep its grass alive, how reliable do you think the police patrols are in this 'hood?

Look, I don't blame the bank for trying to swing for the pricing fences. After all, they loaned out $470,000 (!) on this joint...why not try to alleviate the pain as much as possible?

But $309,000 seems woefully out of line with reality.

However, my brief house-hunting adventure this weekend proved it really is the Wild West out there. I stopped by a small fixer-upper on a tiny lot, in a decent neighborhood, which sold for about $360 per square foot in 2001. I wasn't that impressed, but other than the ridiculous asking price it had potential. Given the 185-day, stale-ass asking price, I was thinking about submitting a lowball offer.

Yeah, it just went under contract for $550 per square foot.

Did I mention it's a small fixer-upper on a tiny lot?

As the Shins once said, logic will break your heart. It's crazy out there. Choose wisely.