The Magically Expanding House: FINAL UPDATE

Sold on 09/02/11 - $605,000

Well, that only took 400 days.

Look at this long, sad saga:

Sep 02, 2011 - Sold $605,000
Jul 15, 2011 - Pending (Backup Offers Accepted)
Jul 08, 2011 - Price Changed $609,000
Jun 17, 2011 - Price Changed $639,000
May 27, 2011 - Listed (Active) $649,000
May 27, 2011 - Delisted (Cancelled)
May 17, 2011 - Price Changed
May 09, 2011 - Price Changed
Apr 25, 2011 - Price Changed
Mar 30, 2011 - Price Changed
Mar 04, 2011 - Relisted (Active) $699,900
Mar 04, 2011 - Delisted (Hold)
Mar 04, 2011 - Relisted (Active)
Mar 03, 2011 - Delisted
Mar 02, 2011 - Listed
Nov 14, 2010 - Delisted (Expired)
Oct 05, 2010 - Price Changed
Sep 27, 2010 - Price Changed
Aug 27, 2010 - Price Changed
Jul 15, 2010 - Listed (Active)
Apr 14, 2010 - Sold $405,000

Hey, a $200,000 profit! This flipper must really know what he's doing!

Not so fast, punchy.

Setting aside the fact that flippers who know what they're doing actually, you know, flip houses instead of chasing the market down for 13 months, you need to delve a little deeper into his "profit" to determine how well he really did.

First, consider the carrying costs of roughly $28,000 while this thing languished on the market for more than a year. Second, he had to shell out $36,300 in sales commissions. Finally, I estimated the upgrades and repairs at about $120,000.

So he cleared roughly $420,000, for a true profit of a measly 15 grand. Sure, my renovation cost estimate could be too high, but when the list of upgrades includes landscaping, new bathrooms, windows, doors, roof, custom deck, granite counters, appliances, floors, tankless water heater, a new two-car garage and copper plumbing...I'm pretty confident in that price tag.

Remember, this is how the place used to look:

Anyhow, the point is that it looks like the flipper -- who nearly became a flopper -- didn't walk away with much profit for all that work, stress and risk.

So, things didn't work out as planned for the seller. But what about the buyers?

Well, they paid $405 per square foot, which is pretty good for the Heights. And considering the aforementioned upgrades, they won't have to put a dime into the place for a long, long time (other than replacing those cheap-ass laminate floors). Plus, they locked in an insanely low interest rate, putting the total monthly nut at about $3,000. It's doubtful that this place rents for that much, but if you include tax write-offs, they have a very manageable payment likely lower than local rents.

Plus, even if they overpaid, what choice did they have? There ain't shit out there. Believe me, I've been looking like crazy and the inventory situation is downright pathetic.

Go ahead and do a Redfin search for Long Beach houses between $550,000 and $650,000. I count 12 houses in the Heights. Five are pending and two are short sales (one just clocked 343 days, the other is 205 -- obviously not for sale). So, basically this buyer had just five houses in the Heights to choose from.

FIVE.

It's ridiculous.

And now that the Super Summer Selling Season(tm) is over, I'm expecting inventory to decline even further. This is just how it's going to be for the next few years. It sucks, but artificially restricting supply is the only way to increase demand.

I got really close to buying a condo a few months back, but to get it I had to overpay -- and the seller and I knew it. The reason was because this unit was the only game in town. Other nearby condos were either inferior, short sales not really for sale, or dreamers with equity trying to get wishing prices (some of which are now pulling their listings until next spring).

Anyhow, because this condo had very little competition, the seller was in the power position and wouldn't come down far enough to get a deal done. The attitude was, "Where else you gonna go, pal?"

And they were right. I needed to put some mustard on the deal to make it happen.

But I just couldn't bring myself to knowingly overpay in such a soft economy. Values certainly aren't going up any time soon, but my concern was that they would continue to go down -- and I wanted my offer to reflect that and build in some cushion against further deflation.

So, the deal fell apart.

Worse yet, it's under contract now. I'm dying to find out how much it sells for. If it's close to my last offer, I'll be really bummed out. I'll kick myself for not throwing in a few more bucks just to get in there. If the sales price is way more than my offer, I won't have any regrets.

But hey, life goes on. Unless something crazy happens this winter with banks unloading inventory, I'll have to put homeownership on the back burner until next spring. Not the end of the world. The weather is great, the future is bright, and there are more important things in life.

UPDATE: Jim the Realtor had a related post today, Buyer Frustrations.

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

Price changed from $639,000 to $609,000

Ouch. This is getting uglier by the day. They've knocked off $90,000 from the list price and still no action. I mean, psychologically how do you think that feels?

This flipper is still ahead of the game considering he paid only $405,000 in April 2010, but that seemingly fat $204,000 profit cushion isn't as comforting when you consider the 15 months of carrying costs, the substantial money he sunk into the flip ($80,000? $100,000?), and of course paying out commissions ($36,000).

It's not like he'll lose money on the deal -- I think even in the worst-case scenario he'll break even. But I'm sure he'd like to gain some profit for his trouble, so with the fall and winter months (and his one-year MLS anniversary) approaching it would be wise to keep cutting.

But with a listing history like this, would you characterize this flipper as "wise"?

Jul 08, 2011 - Price Changed $609,000

Jun 17, 2011 - Price Changed $639,000

May 27, 2011 - Listed (Active) $649,000

May 27, 2011 - Delisted (Cancelled)
May 17, 2011 - Price Changed
May 09, 2011 - Price Changed
Apr 25, 2011 - Price Changed
Mar 30, 2011 - Price Changed
Mar 04, 2011 - Relisted (Active)
Mar 04, 2011 - Delisted (Hold)
Mar 04, 2011 - Relisted (Active)
Mar 03, 2011 - Delisted
Mar 02, 2011 - Listed
Nov 14, 2010 - Delisted (Expired)
Oct 05, 2010 - Price Changed
Sep 27, 2010 - Price Changed
Aug 27, 2010 - Price Changed
Jul 15, 2010 - Listed (Active)

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

Price changed from $659,000 to $649,000

How's that market chasing workin' out for ya?

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

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.

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




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.

The Magically Expanding House: UPDATE III

Price changed from $639,000 to $609,000

Ouch. This is getting uglier by the day. They've knocked off $90,000 from the list price and still no action. I mean, psychologically how do you think that feels?

This flipper is still ahead of the game considering he paid only $405,000 in April 2010, but that seemingly fat $204,000 profit cushion isn't as comforting when you consider the 15 months of carrying costs, the substantial money he sunk into the flip ($80,000? $100,000?), and of course paying out commissions ($36,000).

It's not like he'll lose money on the deal -- I think even in the worst-case scenario he'll break even. But I'm sure he'd like to gain some profit for his trouble, so with the fall and winter months (and his one-year MLS anniversary) approaching it would be wise to keep cutting.

But with a listing history like this, would you characterize this flipper as "wise"?

Jul 08, 2011 - Price Changed $609,000

Jun 17, 2011 - Price Changed $639,000

May 27, 2011 - Listed (Active) $649,000

May 27, 2011 - Delisted (Cancelled)
May 17, 2011 - Price Changed
May 09, 2011 - Price Changed
Apr 25, 2011 - Price Changed
Mar 30, 2011 - Price Changed
Mar 04, 2011 - Relisted (Active)
Mar 04, 2011 - Delisted (Hold)
Mar 04, 2011 - Relisted (Active)
Mar 03, 2011 - Delisted
Mar 02, 2011 - Listed
Nov 14, 2010 - Delisted (Expired)
Oct 05, 2010 - Price Changed
Sep 27, 2010 - Price Changed
Aug 27, 2010 - Price Changed
Jul 15, 2010 - Listed (Active)

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

Price changed from $659,000 to $649,000

How's that market chasing workin' out for ya?

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

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.

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




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.

The Magically Expanding House: UPDATE II

Price changed from $659,000 to $649,000

How's that market chasing workin' out for ya?

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.

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




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.

The Magically Expanding House

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.

Overdone, But Hasn't Done Enough

Thanks to LBCee for sending in today's property.

Address: 242 PROSPECT Ave, Long Beach, CA 90803

Wishing Price: $1,350,000
BEDS: 2
BATHS: 0.75
SQ. FT.: 1,476
$/SQ. FT.: $915
LOT SIZE: 6,347 Sq. Ft.
YEAR BUILT: 1923
COMMUNITY: Belmont Heights/Alamitos Heights
MLS#: P769097
ON REDFIN: 10 days
DESCRIPTION: This lovely bungalow will captivate you from the moment you step inside with its warm character and special attention to detail. Enter the garden dolloped with colorful flowers and bushes. Don't miss the exterior walls which were painted with what looks like whipped cream. Walk up the Spanish tiled steps to the veranda and enter your dream home through the gorgeous custom wrought iron double doors. Step inside to see a large main living space with lots of sunlight. Don't miss the custom hand-cut 12' wood plank flooring. A separate dining area leads you to a beautifully remodeled chef's kitchen with granite countertops and backsplash and top of the line appliances. Crown molding and recessed lighting. Bathroom is covered with Carrera marble tiles from floor to ceiling. Lovely back garden with 2 patios. Main house 1000 sq ft, rental studio 476 sq ft is over garage, currently rented for $1000/mo.

HI PUPPIES!

This greed-faced dreamer plunked down $545,000 13 months ago, slapped on some paint and bullshit bling from the bygone bubble days like "custom hand-cut 12' wood plank flooring" (12-foot planks? Wow!) and "Carrera marble tiles" and now believes he is entitled to an $805,000 profit.

YOU.

MUST.

BE.

JOKING.

The only explanation for this brazen level of greed and stupidity is that when inventory looks like this:


...your typical delusional, greedy Long Beach seller undergoes a violent transformation and becomes the Incredible Hulk of unbridled, greedtarded fury.

"ME PLAYCE SPESHALLLLL!"

Look, this house is certainly nice (if a bit overdone) and nobody can deny that a decent amount of effort and money went into this flip:

But do you see anything in here -- anything -- that would justify the asking price of $1,350,000?

Or even half the asking price?

To me this tiny, 1,000-square-foot bungalow seems like a pretty standard Belmont Heights restoration (despite how obviously impressed the seller is with himself -- get a load of that flowery description: "Don't miss the exterior walls which were painted with what looks like whipped cream." Ugh, I'm gonna paint the walls with vomit). Peep:

Mehhhhhhhhh.

Does that look like a $1.35 million house to you? Really?

And sorry, but I fucking hate those "12-foot" (never trust a realtor who doesn't know the difference between 12' and 12") plank floors. What, you going for that "hog barn" look?

And check out the stunning amount of effort spent on the back yard:

Again, the asking price is $1,350,000.

The upgrades are decent, but he hasn't done nearly enough to approach the rare air of this price range.

How far off is this delusional fool? Let's look at the sold comps:

$540,000
4725 East SHAW St
Sold on Nov 30, 20100.21 miles
3 bd / 1 ba
1,440 Sq. Ft.

$660,000
285 ROSWELL Ave
Sold on Nov 25, 20100.26 miles
3 bd / 2 ba
1,484 Sq. Ft.

$610,000
308 SAINT JOSEPH Ave
Sold on Aug 30, 20100.3 miles
3 bd / 1.75 ba
1,300 Sq. Ft.

$839,500
222 SAINT JOSEPH Ave
Sold on Sep 30, 20100.32 miles
2 bd / 2 ba
1,600 Sq. Ft.

$560,000
305 ARGONNE Ave
Sold on Sep 03, 20100.33 miles
2 bd / 1.5 ba
1,388 Sq. Ft.

$585,000
370 XIMENO Ave
Sold on Feb 11, 20110.34 miles
3 bd / 1.5 ba
1,706 Sq. Ft.

$414,000
242 Mira Mar Ave
Sold on Sep 10, 20100 miles
2 bd / 1 ba
1,533 Sq. Ft.

$360,000
4324 East 4TH St
Sold on Sep 30, 20100.4 miles
3 bd / 2 ba
1,352 Sq. Ft.

$595,000
362 GRAND Ave
Sold on Dec 15, 20100.54 miles
3 bd / 1.75 ba
1,272 Sq. Ft.

$714,000
281 COVINA Ave
Sold on Dec 15, 20100.57 miles
3 bd / 2 ba
1,472 Sq. Ft.

A transaction at this fantasyland price would instantly raise the value of comps by nearly 50%!

For a bit of perspective, the current price-per-square-foot of $915 can only be exceeded by properties ON THE SAND OR WATER IN NAPLES.

Really, dummy? You think you're in that league? Dude, you don't even have a full bath!

One of those sold comps stood out in particular. 285 Roswell sold in November sold for $660,000 -- less than half the price of this over-improved shrine to irrational exuberance. Sure, Roswell's upgrades aren't on par with our featured property's, but it's still pretty freaking nice:

I mean, fuck. At least he's got grass!

(Instead of just sitting around smoking it all day. ZING!)

And for those of you who think Roswell's not a good comp because the upgrades aren't up to snuff, I'd bet the keys to my car that for under $115,000, you could get it to look as good or better than the featured house. And you would have saved yourself nearly $600,000 in the process.

"But El Bee, that isn't a fair comparison. Not everybody wants the hassle of buying a place then fixing it up -- some prefer to pay a premium for a completely turn-key house."

Fair enough. So now I'll pick a fully upgraded, currently listed competitor and to make things interesting I'll highlight one in The Shore (which commands a premium and will make Prospect's ask seem more reasonable). 115 Covina is much bigger, fully upgraded, has 2.5 baths, and sits on the ocean-side of 2nd Street.

For all of those features in such a prime area he's gotta be asking somewhat close to 242 Prospect's price, right?

WRONG.

Covina's asking $950,000, or $544 per square.

So if you bought 115 Covina, which, like 242 Prospect, does not require one dime of upgrades, you would save yourself $400,000.

With that kind of math, do you suppose anyone will line up to pay $1.35 million for our featured property?

I just don't see it. But what I do see is a big, fat price reduction in this greedhead's future.