Wednesday, March 20, 2013

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.

Saturday, March 24, 2012

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:
207 NIETO Ave, Long Beach, CA 90803
Poltergeist pipe!

Good luck putting up crown moulding, Chachi.

And look at this sad-ass kitchen:
207 NIETO Ave, Long Beach, CA 90803
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 is $787,860.

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


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.

Monday, March 19, 2012

Inventory Update

Long Beach number of homes for sale graph

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.

Wednesday, February 15, 2012

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:

146 LA VERNE Ave, Long Beach, CA 90803146 LA VERNE Ave, Long Beach, CA 90803

This is my absolute favorite:
146 LA VERNE Ave, Long Beach, CA 90803

You're not even trying!

This is going to be a very entertaining spring.

Thursday, February 2, 2012


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!


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:
732 North WASHINGTON Pl, Long Beach, CA 90813
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?


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?
Long Beach number of homes for sale graph

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



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:


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



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.