New Blog!

When I started this blog I promised that once I finally bought a property I would walk away.  And 11 years ago that's exactly what I did.  I have long since sold that property and no longer live in Long Beach, but my passion for real estate has never gone away.

So I started a new blog to track the ongoing correction in Big Bear, CA:

Bigbearbummers.com

Please come by and say hello!

-El Bee (now Big Bearish)

Inventory Update

I haven't posted in ages (I promised I would shut down this blog once I bought a house, which I did last year), but recently got a request to revisit the inventory situation in Long Beach and thought I would put some numbers to what I'm seeing on the street.

To wit: as of February, there were 447 homes for sale in Long Beach -- an abysmal 57.7 percent reduction from this time in 2012.

As you can imagine, this has created quite a feeding frenzy.  Median list prices are up 38.6 percent from last year -- nearly 10 percent of that since January 2013 alone -- indicating this reduced inventory is emboldening sellers.  But this boldness is being rewarded, as properties are closing for 100.1 percent of these greatly inflated asking prices.

As a result of this inventory squeeze, in my area I have seen absolute dog shit sell for huge premiums.  It's insane.  According to Zillow (so take it with a grain of salt), my house has seen an 18 percent increase in value since I bought it in 2012.  That figure sounds crazy, but keep in mind I bought well (I should hope so, given all the time and energy I spent educating myself about real estate and writing this blog) and Zillow's estimated price-per-square-foot is consistent with recent sales.

Not surprisingly, I'm starting to hear more talk of another bubble forming.  But before we start using the B-word, don't forget that lending has tightened significantly -- other than FHA peeps, there aren't a whole lot of underqualified buyers anymore.  My guess is this is a bubble, but a flight-to-quality bubble, meaning today's buyers have money, are planning to stay put and aren't buying just any old poo-pile with intentions to immediately flip.  Quality buyers seeking quality properties and stable quality of life.

If values go down from here (it's certainly possible if rates go up or inventory explodes, but I think rate increases will just scare more people into taking action, and in premium areas there are plenty of sellers dying to gobble up any additional inventory), I just don't think we're going to see a rash of foreclosures like we did in the aftermath of the Great Housing Bubble.

As far as inventory, I don't think even the most bullish person out there predicted the banks and government would have been able to keep supply so artificially repressed for so long.  I know I kept anticipating an "inventory tsunami," but at this juncture that seems highly unlikely.

I mean, it makes perfect sense:  Kill supply and demand skyrockets (and neighborhood values go up, making any remaining struggling homeowners suddenly above water).  So the .gov and banks should do whatever it takes to make that happen.  And as long as the powers-that-be can keep it up -- and honestly, why wouldn't they be able to at this point? -- this will be the New Normal.  Sucks eggs, but that's just how it is.

But what happens when inventory increases -- is the inverse true?  Will prices drop through the basement?

Not in premium areas, apparently.  Belmont Shore inventory is up a whopping 57.7 percent from last year (to be fair 2/2012 didn't have a lot of listings, but still) yet asking prices are up 45.6 percent.

"But El Bee, an asking price is just that -- it doesn't mean they'll get it."

You're right.  They're not getting those prices -- the sale-to-list percentage in The Shore is four percent HIGHER compared to last year!

Yowza!  That means people are getting full-asking prices and then some -- despite the increase in inventory.

Like I said, flight to quality.  With today's practically-giving-money-away interest rates and the significant reduction in prices from just five years ago, people are able to buy a lot more house for a lot less money.

I realize this is a pretty bullish post, and that as a newly minted homeowner I'm incredibly biased, but this is just what I'm seeing and hearing.

I'm very curious to hear what experiences you've had recently, especially those who are currently looking or have been outbid.

I miss all of the readers and killer input.  I hope all is well with all of you.

Schadenfreude: UPDATE

In one week this turd waffle will celebrate the three-year anniversary of trying to unload his over-improved albatross.

What a tit.

Although at least now I see why he was so reluctant to post interior photos:

Poltergeist pipe!

Good luck putting up crown moulding, Chachi.

And look at this sad-ass kitchen:

Is this a playhouse? Where the hell do you even buy those miniature appliances? The microwave looks monstrous compared to that lil' Easy-Bake Oven below.

Yes, yes, I'm sure that's a photo from the rental unit, but it's still funny looking. I mean, how much square footage are you really saving?

This dumbass needs to just throw in the towel. I guess compared to the 2009 asking price of $1,295,000, begging for $979,500 seems downright reasonable.

But this price is still way out of line with reality. The thing I have never understood about these delusional sellers is how, after years on the market begging for someone to buy their property, the thought never goes through their mind that maybe, just maybe, the price is too high.

Even markets as artificially supported as ours have a ruthless efficiency about them: Reasonably priced stuff sells, overpriced stuff sits. It's the same for cars, dishwashers, used music equipment on eBay...things priced to sell, sell.

Insane price per square foot ($639) aside, I'm betting the proximity to that huge apartment building next door, the nearby alley, and the BofA parking lot are keeping buyers away. Not to mention how crazy it is to ask a million bucks for a house with three bedrooms and only one bathroom.

Alas, the parade of delusion marches on.

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

Post from 4/2009:

Now that the real estate bubble has burst, there is plenty of schadenfreude to go around. Those who were priced out of the market, refused to participate in the irrational exuberance, or who didn't buy into the frenzy just out of dumb luck, are all watching with amazement (and yes, a bit of glee) as the house of cards burns to the ground.

Personally, I was made to feel like a fool for not buying an overpriced house in 2005 and had to endure condescending conversations with people who barely made it out of high school but were now rolling in fake "equity" and looking down on me for being a lowly renter. And when I started this blog I was castigated further for pointing out the truth and documenting the all-too-obvious housing bubble implosion. So I have to admit that many aspects of the housing crash bring a smile to my face.

Some say it's wrong to take pleasure in others' misery. In certain circumstances that's true, but that won't dissuade me from feeling all warm and fuzzy inside when some idiot flipper, who helped bid up housing prices beyond the reach of hardworking families, mistimes the market and loses his ass. That makes me smile.

Or when an arrogant seller, willfully ignorant of reality, slaps an insane WTF price on his house and refuses to even make counter offers on what they consider "lowball," "offensive" offers. Then, once they realize they're in a position where they can no longer afford their monstrous mortgage and lower the price, it's too little, too late. And they end up chopping tens of thousands (or hundreds of thousands, depending) off the price...all to no avail. The market has long passed them by and they are punished for their greed with the haunting realization that they just cost themselves an extra $100,000 by refusing to deal when they had the chance. That tickles me pink.

Obviously the schadenfreude is tempered by the fact that you and I ultimately will pick up the tab for this mess (enjoy my money, CitiBank!), but still.

And there are limits to how far the schadenfreude should extend. People are always quick to drag out the (incredibly rare) exception of the person who was diagnosed with cancer and had to use their mortgage money for chemo treatments. OBVIOUSLY nobody should take great pleasure in that person losing their (our) house.

And I have some friends in shaky situations, and I don't want to see anything bad happen to them. However, I also don't want anyone--even my own friends and family--to get the impression they can live well beyond their means without very steep consequences.

And guess what? Other than a ding on a credit score, the worst thing that happens to people that lose a house is they rent. Nobody is being put on a rack and having their arms torn out of their sockets--you just rent. You still have shelter. There is no shame in that and, as is so clear now, renting was the right move all along during this unprecedented run up in housing prices.

My point is, if you're a person angry at those that appear to take pleasure in others' failures, just take a look at this listing and tell me you don't want these sellers to fail, and fail MISERABLY.



Address: 207 Nieto Ave, 90803
Asking Price: $1,295,000
Year Built: 1924
Size: 3 beds, 2 baths, 1,533 sq. ft.
$/Sq. Ft.: $845
Purchase price: N/A
Purchase date: N/A
MLS#: P681498
On Redfin: 22 days
Down Payment: $259,000
Monthly Payment: $8,000 (@6.75% jumbo)
Income Requirement: $370,000
Description: California classic expanded to include a 2 br./1 bath residence with large master suite and an additional 1 br./1 bath deluxe apartment above a large 2 car 1 bath garage, housed in a separate building. Resort Living at its finest! Enter seclusion through solid Brazilian mahogany gates as the protection of hand-laid brick privacy fencing surrounds you; yet, the heart of the shore's action is only steps away! A passage of spectacular stoneware planters and exotic fishtail palms leads to a courtyard w/2 deep-seating patio conversation areas, an outdoor kitchen, fountain, and bbq. Premium Super-Krete garden-stone graces the deck. From copper/galvanized plumbing, bronze emergency shut off, secured storage area, tank-less hot water, and bronze solar window screens, to the large Mediterranean dining-set w/ umbrella for outdoor entertaining, the exquisite charm & meticulous attention to detail of this Hacienda Oasis is amazing! Design elegance that translates into near Zero-Need-Upkeep.

$845 per square foot? FUCK YOU. DIE IN A FIRE.

See, doesn't that feel good?

And what exactly is wrong with the realtor that they include only five photos of the house, and THREE random "Scenes of Long Beach." Tell me exactly what this has to do with your listing:



How about a picture of, oh, I dunno, THE FREAKING KITCHEN?! Is it too much to ask you to include a snap of one of the bathrooms? This is what you think sells houses?



WTF? If those idiotic waste-of-bandwidth photos are what sell houses, then here are a few more you should definitely add to the listing:







What a dolt.

And it's worth mentioning that out of the five actual house-related photos, only one, count 'em, ONE, is an interior shot:



Gee, thanks.

And the others are as useless a snooze button on a smoke alarm:







Judging by the realtor's marketing "skills" I'm going to take a stab in the dark here and guess that their business isn't doing too well these days. Just a hunch.

And then there's the price. Let's consider what this seller sees all around him to better gauge how they arrived at their insane asking price. After all, maybe Belmont Shore is holding up better than we think. Let's see:

On a price per square foot basis, this is by far the most expensive listing in ALL of Belmont Shore. The average in BS is $478/Sq. Ft.

Of the handful of BS homes lucky enough to have sold in the last four months, the most expensive went for exactly half of this asking price.

Even the most optimistic rainbow-bolts-shooting-from-your-rectum estimate from the always laughable Zillow.com is $787,860.

So how on earth do you explain the decision to ask $1,295,000?!

AVARICE.

Pure and simple.

And sometimes the only way to respond to this level of greed is to wish misery, failure, and abject financial ruination upon them to teach them a lesson about letting the worst in human nature take over.

Inventory Update

Long Beach inventory is down 16.3% between February and January, and down 37.9% from this time last year.

In Belmont Shore, it's even worse. Inventory is down 41.7% month-to-month, and an astounding 61.1% versus last year. Mind you, we're well into the Super Spring Selling Season so this doesn't bode well for summer's prospects.

However, the good news for everyone but buyers is this scant inventory is doing wonders for the stability of home prices. The median sold price of $582,000 is up 0.4% versus last year.

Basically, if you want to live in the Shore, and are allergic to short sale shenanigans, you're screwed. The handful of equity sellers out there are definitely in the driver's seat.

It's frustrating, I know. But this is our future.

A New, New Low

A while back I openly prayed for the hilarious staging-by-photoshop trend to catch on.

Well, it looks like it's gaining traction:

This is my absolute favorite:

You're not even trying!

This is going to be a very entertaining spring.