Landlocked in "The Other" Long Beach: FINAL UPDATE

Jul 12, 2001 - Sold $135,000
Mar 23, 2006 - Sold $380,000 (+24.7% per year)
Aug 21, 2009 - Listed $229,900
Feb 8, 2010 - Sold $203,000 (47% loss in value in 48 months)

I think $203,000 is still too much money for this dump, but at least the bank's long, painful journey is over with. But we taxpayers still ate a shit sandwich on that one.

This sales price of $203,000 is 4x times the median income--stretching it, but fairly common for SoCal--so they might be able to keep up with the loan payments. But this was most certainly an FHA loan requiring no skin in the game, so let's just hope they can stay employed and keep their current hours, nothing needs repairing or replacing, and life doesn't have any surprises in store (fat chance)...otherwise we'll be eating that loss as well.

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The list price was "$229,900" and changed to "$219,900"

But wait, when you originally listed this dump for $230,000, the listing description claimed, "This property is priced for a quick sale."

But that was 74 days ago. Perhaps "quick" wasn't the best word choice.

So are you saying now it's REALLY priced for a quick sale? Or are you just going to pepper buyers with your incessant bullshit until the next measly 4% price cut?

Then I imagine it will REALLY, REALLY be priced for a quick sale, right?

But who am I to question whether $220,000 is a fair, accurate price? After all, you're the "experts" who three years ago valued this rat's nest at $380,000--clearly you know what you're doing.

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The Caspian Sea is the largest enclosed body of water on the planet. It's said that about 5.5 million years ago, due to geological shifts and other factors, the "sea" became landlocked and essentially became a salt-water lake.

How appropriate that today's property on Caspian Avenue is in such a sketchy area of "The Other" Long Beach (it's practically Compton) and is in such rough shape that is essentially landlocked, i.e. unsellable, in a non-bubble environment. The bank is going to take it in the shorts on this one, but it's pricing as if this house has any redeemable qualities outside of bulldozer practice.


3555 Caspian Ave, 90810
Price: $229,900
Beds: 2
Baths: 1
Sq. Ft.: 832
$/Sq. Ft.: $276
Lot Size: 2,500 Sq. Ft.
Year Built: 1970
MLS#: P700253
On Redfin: 12 days
Down Payment: $46,000
Income Requirement: $66,000
Monthly Nut: $1,300
Description: Truly affordable 2 bedroom home. This property is priced for a quick sale. Opportunity knocks...will you answer the door? This property features tile and carpet flooring, seperate living room and den, updated bath with pedestal sink, updated kitchen with what appear to be newer cabinets and what appear to be granite countertops, and attached 1 car garage. This property has a usable rear yard as well.

So, judging by the photos, you're buying a two-bedroom, one-bath garage. Sweet.

"Opportunity knocks...will you answer the door?" Hell no! Every weekend that opportunity to catch a falling knife is banging on my door--he's worse than the Jehovah's Witnesses!

"and what appear to be granite countertops"? This again? Look, geek--when you're asking hundreds of thousands of dollars for a POS shack, take the fucking time to figure out what you're selling. I mean, don't you think granite countertops would be a plus? Maybe something worth confirming?

That's like saying, "...and what appears to be a swimming pool." It either is or it isn't.

And "seperate"? There seems to be a growing trend of realtors misspelling this word. Maybe the NAR has enough pull to convince Webster's to change the spelling and make me look like the illiterate one.

If you can believe it, near the peak this dilapidated petri dish sold for $380,000. $457 per square foot? ZOINKS!

Aug 21, 2009 - Listed $229,900
Jul 13, 2009 - Sold $136,000
Mar 23, 2006 - Sold $380,000
Jul 12, 2001 - Sold $135,000
Jun 12, 2001 - Sold $100,100
Jan 12, 1990 - Sold $1,000

Then the bank took it back this July for $136,000 (Weird. That would indicate the former loanowners had several hundred thousand dollars in equity/down payment. Or maybe a second mortgage?). Now the lender, who couldn't be bothered to make this shithole presentable, is getting cocky and demanding a $96,000 profit. You're going to need a golden horseshoe up your rectum to pull that one off, pal.

You see, the listing agent claims $229,900 is "truly affordable," but by what measure? Definitely not price per square foot:


And certainly not recently sold comps:

$174,250 3557 Caspian Ave Sold on Jun 16, 2009
0 miles 2 bd / 1 ba 832 Sq. Ft.

$200,000 3521 Baltic Ave Sold on Jun 26, 2009
0.06 miles 3 bd / 2 ba 960 Sq. Ft.

$130,000 3568 Denver Ave Sold on Jun 30, 2009
0.08 miles 2 bd / 1 ba 708 Sq. Ft.

$129,000 3608 Denver Ave Sold on Jul 31, 2009
0.09 miles 2 bd / 1 ba 836 Sq. Ft.

$481,676 3612 Denver Ave Sold on Jul 07, 2009
0.1 miles 1 bd / 1 ba 720 Sq. Ft.

$150,000 3625 Delta Ave Sold on Jun 24, 2009
0.13 miles 1 bd / 1 ba 634 Sq. Ft.

$160,000 1801 W Arlington St Sold on Jun 30, 2009
0.23 miles 3 bd / 2 ba 874 Sq. Ft.

$205,000 1747 W Cameron St Sold on Jun 19, 2009
0.28 miles 2 bd / 1 ba 659 Sq. Ft.

How the hell did the lender figure $229,900 for this turdpile is "priced for a quick sale"?

Have they even looked at an overhead map? It actually looks like a decent little street looking at Street View, but you clearly are not concerned with your personal and property safety if you buy in this area of LB. And you aren't terribly concerned about your family's health if you purchase so close to power lines. And then there's the interior:

Uf da! Get me a Swine Flu mask!

You might point out that some people don't have many options financially and a $1,300 monthly payment is all they can afford. That's true, but wouldn't they be better off renting a nice, big, clean condo in a much safer neighborhood? $1,300 can get you a lot in LB these days, and in very decent areas. And they wouldn't need to worry about losing equity as the market for these undesirable digs gets absolutely crushed in the coming months and years.

In other words, $230,000--ERRRR...sorry: $229,900--is a total, unabashed rip-off and the only thing this is priced for is a good ol' fashioned rot session on the MLS.

Reuters: US food stamps set ever-higher record-32.8 million

Folks, we are in for a difficult, protracted slog. From The Guardian/Reuters:

A record 38.2 million Americans were enrolled in the food stamp program at latest count, up 246,000 from the previous month and the latest in record-high monthly tallies that began in December 2008.

...

USDA estimates up to $58 billion will be spent on food stamps this fiscal year, which ends Sept 30, with average enrollment of 40.5 million people. Food stamps were renamed the Supplemental Nutritional Assistance Program [A rose by any other name...] in 2008.

Participation has surged since the financial-market turmoil of late 2008 and has set records each month since December 2008, when it reached 31.78 million. Enrollment is highest during times of economic distress.

Anyone want to take a stab at finding a silver lining here?

Forget the Mortgage, I'm Paying My Credit Card Bill

Luke Mullins at U.S. News & World Report casts a dark cloud over any pollyanna recovery talk:

Amid high unemployment and sliding home prices, a growing number of struggling consumers are doing what was once considered unthinkable: paying their credit card bills instead of their mortgages. A recent study developed by TransUnion found the percentage of Americans who were current on their credit cards but behind on their mortgage increased to 6.6 percent in the third quarter of 2009, up from 4.3 percent in the first quarter of 2008. Meanwhile, the share of consumers making mortgage payments on time but behind on their credit cards moved in the opposite direction, sliding from 4.1 percent to 3.6 percent over the same time period.

The data reflects a "fundamental paradigm shift" in the way consumers prioritize payment of debt obligations, says Ezra Becker, of TransUnion. "This is dramatically different," he says. "It is a clear manifestation of the dynamics that lead up to the recession and the recession itself."

Before the housing crisis, bankers typically operated under the assumption that homeowners would do whatever possible to remain current on their mortgage--even if that meant falling behind on other bills. "It used to be that the mortgage was sacrosanct," says Keith Gumbinger of HSH.com. "You paid it before anything else." But a combination of factors linked to the current economic mess--falling home prices, high unemployment, and tight consumer credit--have lead many consumers to prioritize credit card payments above mortgage bills. "This sort of thing is what keeps bankers awake at night," Gumbinger says.

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Still, another key factor is the disparate consequences associated with defaulting on a mortgage versus those for falling behind on a credit card. National anti-foreclosure efforts have worked to significantly extend the time period between a borrower's initial mortgage default notice and the foreclosure itself, says Edward Pinto, a former chief credit officer at Fannie Mae. "The last thing you have to worry about at this juncture is paying your mortgage because by the time they foreclose it could be six months, 12 months, or a year and a half down the road," Pinto said.

A credit card, however, can disappear much quicker, Becker says. "If you go a couple months without paying your credit card bill, they are going to close your account," he says. "You won't be able to access your credit."

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Didn't Even Last Two Years

3101 East 2ND St Unit 4C, 90803
Asking Price: $447,000
Beds: 3
Baths: 1.75
Sq. Ft.: 1,481
$/Sq. Ft.: $302
Year Built: 1963
MLS#: P716383
On Redfin: 34 days
HOA: $175
Down Payment: $17,880 (FHA)
Income Requirement: $128,000
Monthly Nut: $2,900
Description: Spacious Bluff-Park-Condo in great location . .. This top floor light and bright unit features 3 bedrooms, private balcony with peek-a-boo ocean view, newer paint and carpet, attic access, storage areas, and stylish mid-century designer accents throughout. .. Walk to the beach, LB Art Museum, restaurants, and shops. .. Well maintained smaller complex. Must See!

Dang, this is a pretty sweet place. Three bedrooms, nearly 1,500 square feet, a balcony, cheap HOA fee, and in a killer neighborhood. The solo garage spot is a bummer, but hey, you can't have it all.

One thing I like is how the owner used those "stylish mid-century designer accents" to create an overall 50s/60s vibe. I mean, check out this door knob:

And the original stove knobs and old school overhead vent:

Yeah yeah, some might say that shit just looks old, not "designer" (and they'd be right) but you have to admit the seller did a good job incorporating those outdated elements into a cohesive design theme. In a day where pergraniteel is "standard," it's nice to see somebody work with what they have and pull it off reasonably well.

The only major drawback I can see (besides the price, duh) is the proximity to busy-ass, terribly noisy Broadway.

But the good news is you're right across the street from Taco Bell!

I love that particular T-Bell because it's the only one on the face of the planet without a freaking drive-thru.

In any event, this unit appears to be on the 2nd Street side so the traffic noise probably isn't that bad.

So now that we've covered what the seller did right, let's focus on what they did wrong and the reason this property is a topic of discussion.

The sales history reveals this seller mistakenly listened to the bottom callers of 2008 and took them at their word that "the worst is definitely over," and agreed to pay $475,000 for this bad boy. And now, just 22 months later, he or she is trying to sell for a substantial loss. Peep:

Jan 07, 2010 - Price Changed $447,000
Jan 06, 2010 - Listed $449,000
Mar 25, 2008 - Sold $475,000
Jan 11, 2008 - Price Changed $499,000
Oct 26, 2007 - Price Changed $529,000
Sep 14, 2007 - Price Changed $559,000
Jun 23, 2007 - Listed $579,000
Jun 18, 2007 - Delisted
Apr 04, 2007 - Price Changed
Jan 31, 2007 - Listed

The interesting thing is that the previous owner had it on the market for almost exactly a year before our dim-witted knife-catcher decided to step up and take on more than he could chew.

Which means during that year he watched as the price dropped $20,000, then $30,000, then another $30,000 before buying at yet another $25,000 discount AND SOMEHOW BELIEVED THE PROPERTY VALUE WOULD MAGICALLY STOP PLUMMETING.

WTF was he thinking?!

By stupidly jumping in long before the bottom and catching this rusty Ginsu, he just cost himself a minimum of $50,000. And that entry-level loss tragically depends on finding some burlap-head willing to part with nearly $450,000. Good luck with that!

I could understand if this throwback was fully updated, but for this kind of loot most buyers will be looking for detached homes or similarly sized condos on Ocean Blvd. with real ocean views.

But judging by the comps, and a price per square foot about to drop below the $300 mark, this seller might be able to find a greater fool for around $425,000. That still means a major loss, but at least he'll be free from his colossal error in judgment.

At any rate, I think this charming apartment, in a killer neighborhood, is quite desirable...just not $447,000 desirable. That seems woefully overpriced in this ever-competitive market.

Guess we'll just have to wait for Mr. Market to tell us who's right.

Remodeling Rules

Via Mish, some bad news for Long Beach buyers purchasing properties built before 1978 (which, let's face it, is most buyers):

What Remodelers Need to Know About the EPA's Lead Paint Rule

The U.S. Environmental Protection Agency's Lead: Renovation, Repair and Painting rule governing the work of professional remodelers in homes where there is lead-based paint was published in the Federal Register on Earth Day, April 22. The rule will take effect in April 2010.

The rule addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six.

It requires a cleaning inspection after the work is completed and grants the remodeler flexibility in determining the size of the work area, which can reduce the size of the area subject to containment.

The EPA rule also lists prohibited work practices ― including open-torch burning and using high-heat guns and high-speed equipment such as grinders and sanders unless equipped with a HEPA filter.

Additionally, the rule establishes required lead-safe work practices, including posting warning signs for occupants and visitors; using disposable plastic drop cloths; cleaning the work area with HEPA vacuuming and wet washing; and individual certification through a training course.

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1. Training and Certification

Beginning in April 2010, firms working in pre-1978 homes will need to be certified. Along with the firm certification, an employee will also need to be certified as a Certified Renovator. This employee will be responsible for training other employees and overseeing work practices and cleaning. The training curriculum is an eight-hour class with two hours of hands-on training. Both the firm and Certified Renovator certifications are valid for five years. A Certified Renovator must take a four-hour refresher course to be recertified.

2. Work Practices

Once work starts on a pre-1978 renovation, the Certified Renovator has a number of responsibilities. Before the work starts this person will post warning signs outside the work area and supervise setting up containment to prevent spreading dust.

...

Clean up procedures must be supervised by a certified renovator.

3. Verification and Record Keeping

After clean up is complete the certified renovator must verify the cleaning by matching a cleaning cloth with an EPA verification card. If the cloth appears dirtier or darker than the card the cleaning must be repeated.

A complete file of records on the project must be kept by the certified renovator for three years.

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CLICK HERE FOR FULL ARTICLE...

To paraphrase Mish, these regulations, going into effect in mere months, virtually guarantee fixing up a house in the LBC just got a lot more expensive.