ARTICLE: Cash-strapped Long Beach seeks to tax marijuana

From Tony Barbosa at the LA Times:

Long Beach could join several other California cities in seeking to boost city coffers by taxing marijuana.

The City Council on Tuesday will consider a proposal to place a measure on the November ballot that would levy a 5% tax on medical marijuana collectives.

Another tax of up to 10% on other marijuana businesses would go into effect only if California voters also pass Proposition 19, which would legalize, regulate and tax marijuana for recreational use.

Long Beach's proposal, drafted by the city’s Department of Financial Management, also calls for taxing medical marijuana cultivation sites at .0075 cents per square foot.

...

Long Beach is facing an $18.5-million budget deficit, and for some on the city council, which voted in May to regulate medical marijuana collectives, taxation is the next logical step.

"We tax alcohol. We tax cigarettes. Why wouldn't we look at taxing marijuana?" Long Beach Councilman Patrick O’Donnell said. "We're turning over every rock to find new revenues, and under one of those rocks may be marijuana."

...

"It's difficult to tell cities that are cash-strapped in tough economic times that you can't tax this substance,” he said. "But there are other methods that local governments could use to raise the money; one of those methods is to tax the production side."

...

This is good news for buyers. You see, all those Long Beach sellers, obviously high as fuck if they're still sticking to wishing prices despite evidence of a double-dip in housing, might be forced to cut back on the weed if this new tax is passed on to consumers. Fewer bong loads, clearer minds, lower prices!

Pass that tax!

In all seriousness, with an $18.5-million deficit, LB has a serious budget problem. And in addition to cutting services, the solution is new and "innovative" revenue generation schemes like this.

I sure hope you recent buyers factored in increased costs of living in the form of new taxes, hikes in existing taxes, increased city fees and fines (think property assessments, street sweeping tickets, traffic citations), not to mention State and Federal attempts to squeeze blood from a turnip.

This isn't a political statement, it's statement of fact: We have had decades of debt-binging on cheap, easy credit, and the time has come to pay the piper.

CLICK HERE FOR THE ENTIRE ARTICLE...

$50,000 Off in Just Four Weeks...How Low Will it Go?

I sent my buddy W the link to this apartment a while back and when I saw him at the BBC a few nights ago he mentioned it had already been on his radar. We tried to determine how overpriced it is (there was no debate about whether it actually is overpriced) while agreeing it is big, very nice inside, and in a prime location.

3819 East LIVINGSTON Dr #4, Long Beach, CA 90803
Wishing Price: $329,000
Beds: 1
Baths: 1
Sq. Ft.: 902
$/Sq. Ft.: $365
View: Peek-A-Boo
Year Built: 1959
MLS#: S619384
On Redfin: 31 days
HOA: $300
Down Payment: $13,000 (FHA)/$65,800 (20% down)
Income Requirement: $94,000 (income = home price/3.5)/$75,000 (income = mortgage/3.5)
Monthly Nut: $ 2,400 (FHA)/$2,000 (20% down)
Description: * * * Complete Remodle * * * Reduced price for quick sale. .. This beautiful one bedroom condominium is turn key and ready to move-in. New gourmet kitchen with top of the line stainless steel appliances, custom cabinets, granite counter top and custom lighting. The dinning room features custom cabinets finished with granite counters. The newly remodeled bathroom features a beautiful shower with travertine and marble design enclosed with custom glass door, the new bath tub is surrounded with custom tile and marble, the vanity has a marble counter top and glass bowl sink. This home has new lighting, new paint, new base boards, new windows, new carpet, new tile floors and much much more.

"Remodle"?

"Dinning"?

Although the realtor they chose is obviously an illiterate dummy, the sellers at least seem to possess some common sense. I say that because they have demonstrated a willingness to meaningfully slash the price in a short amount of time:

Jun 27, 2010 - Price Changed $329,000
Jun 18, 2010 - Price Changed $349,000
Jun 01, 2010 - Listed $379,000

Aggressive!

Besides hinting at a determination to get it sold, all that $50,000 in price reductions (in four weeks!) really tells us is that this joint was $50,000 overpriced. You have to be aggressive when you start out with a WTF $379,000 asking price.

DUDE, IT'S A ONE-BEDROOM APARTMENT.

You must be pals with this moron.

So, given how effortless it was for this seller to lop off so much "value," how do we know this place isn't still 50k overpriced? Fundamentals, my friends, fundamentals.

The income requirement of $94,000 seems high, even for this area, but if you calculate the less conservative 3.5 times mortgage (and not 3.5 times price), $75,000 per year seems totally feasible. And Southern California buyers are clearly not conservative when it comes to homeownership, so I'd say that fundamental has been met.

Interestingly, there are no sold comps for reference. Not a single 1 bed/1 bath has sold in this area during the last six months. So we have to fall back on Rent vs. Buy. With 20% down, your monthly nut will be $2,000. I seriously doubt this place, as nice as it is, could get more than $1,400 in rent. Not without a direct ocean view.

Which means if the going got rough and you had to relocate for work but couldn't sell (thanks to hefty sales commissions and the likelihood that appreciation is dead for the next few years), you would eat, at a minimum, $600 a month just to keep this "investment" and maintain your FICO score.

Yikes. I hope that new job pays a lot more than your last gig.

Worse, if a buyer goes FHA (which, let's be honest, is exactly what's going to happen) then the monthly outflow jumps to nearly $2,400!

FOR A ONE-BEDROOM APARTMENT.

So, clearly that fundamental has not been met because (debt)ownership entails a $1,000 monthly premium over renting. Yes, yes, the mortgage interest deduction will somewhat narrow that margin (you'd still paying about $400 per month more to own even after the tax write-off), but as an owner you need to factor in the likelihood of future tax increases and HOA assessments on a 50-year-old building, and as a landlord you need to factor in vacancy rates and repairs. That's why I think the only reason to buy a one-bedroom is when it's cheaper to own than rent. Period.

Because one-bedrooms are shitty investments to begin with. Compared to a two-bedroom, the rental options are incredibly limited. Either you rent to a retiree or a single professional. That's about it. Students are out because very few can afford to live without roommates. Families are out because one-bedrooms are too small for couples with a kid.

But one-bedrooms are even worse investments when they are upgraded units like this. That's because you need to charge more rent to cover your inflated monthly nut. Which puts you further into the shallow end of the renter pool.

Making matters worse, even if you find a wealthy retiree or cash-flush single (or childless couple without personal-space needs), you're going to have a difficult time keeping them. The retiree is either going to kick the bucket or get sent to a nursing home eventually, and a young single professional is likely to meet someone and get nagged out of the "bachelor pad" and into a house.

High turnover rate is death by a thousand cuts for landlords.

And as spacious and gorgeous as this place is, there's no way you -- or anyone -- will live here for the next 30 years. Which leaves you with two options: Sell for a higher price in 3-5 years, or rent it out for more than the monthly nut.

At this price it would obviously be insanely cashflow negative, leaving only the option to use it as a starter platform and try to sell in a few years for a profit, allowing you to move up into a larger property. Since you'll be paying up to $2,400 each month to live here, you certainly won't be able to save much -- meaning you are betting the farm that rampant appreciation will save you.

And what do you think the odds are that a ONE-BEDROOM APARTMENT will appreciate enough during the next five years to cover your 6% sales commissions and provide enough profit to leverage up into another place?

Infinitesimally small, Chachi.

You see, the disadvantages landlords face in renting out one-bedrooms are the same issues owners face when looking to sell and move up. Who are you going to sell to? That same narrow field of buyers: Well-heeled singles and retirees. Which is why one-bedrooms typically don't appreciate in price as quickly.

Most people don't think about this stuff, but they should.

It's worth noting that the taxable value is $121,947, indicating this is a long-term owner with tons of equity. Which explains the aggressive pricing. And the seller's equity rich status could provide an opportunity for a good negotiator to get a decent price ($280,000 sounds about right for this location). It's not like you'd have to put any money into the thing -- it's fully upgraded and pristine.

Oh, but what's this? No mention of a washer and dryer?

Uh oh. I smell a deal killer.

After poring over the listing details and photos, any mention of in-unit laundry is conspicuously missing.

So let me get this straight: I'm going to pay $2,400 per month for a FOR A ONE-BEDROOM APARTMENT, including a whopping $300 per month in HOA fees, and I have to deal with the colossal pain in the ass known as community laundry?

I rescind my $280,000 target price. The inconvenience of coin-operated community laundry is a huge penalty. And I realize my life is privileged when my biggest concern is avoiding the indignity of having my Brooks Brothers dress shirts dumped on the counter because I left them in the community dryer four minutes too long, but we're talking about shelling out TWO THOUSAND FOUR HUNDRED DOLLARS PER MONTH and having to deal with that bullshit.

For that kind of money, FOR A ONE-BEDROOM APARTMENT, I expect to have a plethora of amenities, the least of which is my own goddamn washer and dryer.

And what was this seller thinking dumping $40,000 to $50,000 into creating a "luxury" unit if the building itself doesn't have any comparable "luxury" features (no pool, no gym -- I wonder if it even has elevators)?

That's like hiring Rolls Royce to install a hand-stitched Corinthian leather interior complete with champagne cooler and suede headliner...in a rusted-out Edsel with manual windows and no engine.

What's the point?

Back From the East Coast with a Quickie: FINAL UPDATE

Sold on 06/28/10 - $325,000

It's a miracle! Hallelujah!

And only $228,000 less than the original approved short sale price! Your two-year pursuit of wishing prices really paid off! That's some next level thinking!

And yes, you read that correctly: This loft has been rotting on the market since June 2008 -- exactly two years. And if you've been following this property like I have it's pretty obvious why:

Jun 28, 2010 - Sold (MLS) $325,000
Apr 22, 2010 - Price Changed $325,000
Mar 19, 2010 - Relisted
Mar 25, 2009 - Price Changed $359,900
Feb 05, 2009 - Price Changed $374,900
Jan 07, 2009 - Price Changed $395,000
Jan 01, 2009 - Price Changed $425,000
Nov 17, 2008 - Price Changed $553,000
Jun 20, 2008 - Listed $549,000

Good God, what a long, arduous, market-chasing ordeal. Do you think the bank regrets not accepting one of those "offensive" low-ball offers of $450,000 or $400,000 back in the day instead of smoking Hope joints and sticking to wishing prices while tens of thousands of dollars of value evaporated before its very eyes?

The sad thing is, despite these catastrophic losses suffered due to an inability to accept reality, there are still people out there who believe housing will come roaring back any minute now.

I remember telling people about this loft way back in the day. I mentioned that it was awesome, but hilariously overpriced. When asked what I thought it was worth, I distinctly remember the looks on their faces when I said, "Around $300,000."

They thought I was high as a kite. "There's no way prices will go down any more." "Do you really believe that?" "That's like half off! That will never happen, dude."

I hate to say I told you so, but I told you so. Look, it didn't take a crystal ball, just common sense and a belief that fundamentals will actually matter once bullshit fantasy financing is removed from the picture. Now that mortgages require actual, verified income, it makes sense that house prices must conform with those incomes. That's a simple calculation.

And Rent vs. Buy is also a simple calculation. If it costs twice as much to own as it does to rent the same house -- it's overpriced. And in light of a horrific employment situation in California, I suspect many people will begin to view homeownership as an anchor and a potential impediment to employment mobility. I'm not saying that renters will suddenly be viewed as anything other than "second-class citizens" but you have to admit that the advantages to renting are starting to become more readily apparent. Because of this, I would not be surprised to see renting fetch a premium over owning once this is all over.

For the record, $325,000 purchase price with 20% down results in a monthly payment (after mortgage interest deduction) of about $1,500. As long as you're cool living downtown, that seems like a decent deal given the significant upgrades and the State tax credit.

Oh, it's also worth mentioning that in two years the listing agent never bothered to fix that glaring "celing" typo in the listing. And for that kind of kick-ass-and-take-names diligence and attention to detail, he cashed a commission check for $19,500. What a country!

Click here for the whole awful saga.

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

UPDATE IV



Mar 25, 2009 - Price Changed $359,900
Feb 05, 2009 - Price Changed $374,900
Jan 07, 2009 - Price Changed $395,000
Jan 01, 2009 - Price Changed $425,000
Nov 17, 2008 - Price Changed $553,000
Jun 20, 2008 - Listed $549,000

It's been 284 days! Put a bullet in this short sale's brain and put it out of its misery already!

Here is a compendium of this property's long, arduous, market-chasing journey: THE SAGA OF SUCK.



Look, I give the agent credit for slashing the price on cue each month for the last few months, but it's clearly not getting the job done. The weird thing is the current asking price is undercutting nearby sellers by a decent amount and $275 per square foot is almost, sort of, kind of approaching reality...so what's the problem? Why no interest?

Honestly, I think it's the sleeping platform.

First, as an investor, you are severely limiting your renter pool with that disco deck. No kids, no older folks--just young, single, wealthy men (you can call me out in the comments, but I don't think the loft-promoting movie Big had quite the same influence on young girls as it did boys--this type of property primarily appeals to dudes).

Second, as an owner occupier you not only have the same problems but, come on, that bedroom barge would be fun for about 3.6 days before you longed for a few walls to hang pictures on and a door to shut every once and a while. Even if you live by yourself, you're telling me being out in the open like that wouldn't get old?

Maybe it's just me.

All I know is last night two smart, economically-educated friends, whose opinions I respect and value, ganged up on me and told me I was dead wrong about house prices continuing to fall in Long Beach--specifically Belmont Shore. They both said that sales are picking up and "prices aren't going to get any lower."

When I countered, "That's what they said six months ago, and a year ago, and 18 months ago...how did that work out for those buyers?" my opinions were promptly dismissed as the biases of a doom and gloomer.

Is it just me, or are people becoming more optimistic lately? But unless I'm missing something, it's wholly unjustified. I get the weird feeling that a lot of folks are "willing" the economy to improve simply because they feel like now is the time.

When I asked them to provide just one positive economic indicator that prices won't continue to fall, I got nothing. What I did get was a "feeling" that this is the bottom and that things can't get any worse.

I know plenty of Long Beach Housing Blog readers who would strongly disagree with that sentiment, but I'm curious to hear from those who are a bit more bullish, or at least have reasons for becoming more optimistic. Any thoughts?

Is it time for me to officially change into my Bull hat?

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

UPDATE III

While some downtown sellers are snorting huge lines of delusion and raising prices amidst the worst employment news in 30+ years (and are too stupid to change the listing description proclaiming, "HUGE PRICE REDUCTION!!!"), some people are beginning to see the light:

In this post I updated you on a kick-ass loft that suffered from WTF pricing when it was originally listed in June 2008. The Housing Kool Aid buzz has slowly worn off, and now we're looking at an asking price nearly 20% lower than the original.



I'll recap so you don't have to look through all the old posts:

Jun 20, 2008 Listed $549,000
Nov 17, 2008 Price Changed $553,000 ("SHORT SALE APPROVED AT $553,000!" )
Jan 01, 2009 Price Changed $425,000
Jan 07, 2009 Price Changed $395,000
Feb 05, 2009 Price Changed $374,900

That right there is a beautiful portrait of what it's like to chase a horrendous market down. Each price reduction is like a David Beckham penalty kick right to the family jewels.

And, to reiterate my point about buying right now being a guaranteed rusty knife-catch, please imagine for a moment that you bought this place in November for $553,000. You would have lost nearly $200,000 in property value in TWO FREAKING MONTHS. Do you have any idea how long it would take you to build that value back up? We're talking 30 years just to break even on the place.



Or what if you bought on January 6th? If you just waited one day, you could have saved yourself enough money to buy a new car with cash.

Don't listen to anybody that tells you we've hit a bottom. Print out this post and carry it around with you if need be! Everybody is eager to call a bottom right now, but Long Beach properties like this are a prime example of why it makes very little sense to buy any property right now--especially one that diverges from basic investing fundamentals.

Considering the $175,000 bloodletting (in less than 90 days, mind you), let's update the listing and see how close we are to said fundamentals:

Address: 207 E Broadway #301, 90802
Asking Price: $374,900
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $286 (down from $422 last time we checked on it)
HOA Fee: $327
MLS#: S537137
On Redfin: 231 days
Down Payment: $74,980 (from $110,600)
Monthly Payment: $2,300 @ 5.5% (from $3,700)
Income Requirement: $107,000 (from $158,000)
Description: Gorgeous south and west facing corner unit loft in the Historic Insurance Exchange Building! True loft living with open loft layout, exposed ceilings, gorgeous blond wood floors and floor to celing windows with city views! Unique floorplan, over 1300 square foot footprint with 1.5 baths, master bath with dual vanity, jacuzzi tub and two person shower. Enjoy additional square footage and privacy from the custom built-out sleeping loft. Central AC and heat, private storage room, secured parking, gourmet kitchen with granite countertops and viking appliances. One of a kind loft in one of the most well designed and sought-after loft conversions downtown.

Nope, still no dice. No way this one-bedroom rents out for $2,300 a month.

So have fun chasing that market down some more, guy! We'll be sure to get you an ice cream cake on your one-year anniversary.

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

UPDATE II

A quick update of a quickie post:

Here is the original post:



Address: 207 E Broadway #301, 90802
Asking Price: $553,000
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $422
HOA Fee: $327
MLS#: S537137
On Redfin: 153 days
Down Payment: $110,600
Monthly Payment: $3,700
Income Requirement: $158,000
Description: SHORT SALE APPROVED AT $553,000!

Well, considering it was priced $4,000 cheaper for 150 days AND STILL FAILED TO GARNER ANY BUYING INTEREST...best of luck with that!

* * * * * * *

As I suspected would happen, that approved short sale price didn't attract a buyer. The new pricing is indicative of serious capitulation, as the short sale asking price has been reduced by a mammoth $103,000 trying to nab a buyer. That's a helluva haircut!

Here is the updated listing information:

Address: 207 E Broadway #301, 90802
Asking Price: $450,000
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $324
HOA Fee: $327
MLS#: S537137
On Redfin: 197 days
New Down Payment: $85,000
New Monthly Payment: $2,700
New Income Requirement: $121,000
Description: Gorgeous south and west facing corner unit loft in the Historic Insurance Exchange Building! True loft living with open loft layout, exposed ceilings, gorgeous blond wood floors and floor to celing windows with city views! Unique floorplan, over 1300 square foot footprint with 1.5 baths, master bath with dual vanity, jacuzzi tub and two person shower. Enjoy additional square footage and privacy from the custom built-out sleeping loft. Central AC and heat, private storage room, secured parking, gourmet kitchen with granite countertops and viking appliances. One of a kind loft in one of the most well designed and sought-after loft conversions downtown.

"celing"?

Despite that typo, I'm thankful they finally bothered to provide a listing description. And a really good one, too! Bravo, bravo!



This loft is about as cool as they come. I'm legitimately impressed. We aren't treated to photos of the bathrooms (uh-oh) but the upgrading work looks new. Assuming the bathrooms aren't disastrous, all you need is some sleek, modern furniture and you're set.

And check out those phantom stairs!

Someone told me those rail-less stairs aren't compliant with building codes (good luck navigating those things after a night of downtown boozing), but damn they look awesome!

And speaking of downtown boozing, if this economic downturn persists well into 2009, I'm wondering if we're going to see an upsurge in downtown criminal activity. It's possible that Long Beach's commendable efforts to clean up downtown and make it a nightlife hot spot will be gradually erased as the unemployment rate climbs and state budget woes create cuts in services to the poor.

I hope that's not the case, but it's something to consider when checking out downtown properties and thinking of long-term values. And considering many downtown properties are (still) woefully overpriced and have yet to see the full force of equity destruction experienced in other Long Beach areas, crime will have a tangible effect on further price declines.

As far as this property goes, I don't know if the bank actually agreed to this greatly reduced short sale price but I fear that it's still not enough to find a buyer in this economic environment. This place would make a great spot for a young, high-income childless couple, or a young, very wealthy single professional, but outside of those specific criteria I can't see much of a market for this place (I mean, that's more of a "sleeping platform" than a "bedroom"--not very practical).

I guess the question is whether that very small, very rare, very wealthy subset of potential buyers that could comfortably afford this place will believe it's worth $450,000. I somehow doubt it.

Bottom Calling Bites Again: UPDATE

The price was "$334,000" and changed to "$324,900"

Ever since the Federal tax credit expired, I've been seeing an awful lot of $10,000 price reductions. Anyone else notice that?

P.S. This greedtard has been on the market for nine months and this is only the second price reduction. Great strategy!

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

Yet another 2008 loser. How long until 2009 losers start showing up?

5898 East NAPLES Plz #302, 90803
Asking Price: $359,000
Purchase Price: $355,000
Purchase Date: 7/2008
Beds: 1
Baths: 1
Sq. Ft.: 719
$/Sq. Ft.: $499
Year Built: 1971
MLS#: R905905
On Redfin: 110 days
HOA: $240
Income Requirement: $90,000
Down Payment: $13,000 (FHA)
Monthly Nut: $2,500 (FHA)
Description: * * * REDUCED $31,000 * * * . This great home is located in the absolutely best area of Long Beach - Naples Island. This top floor unit features a large bedroom, tons of closets, eating area, fantastic kitchen with new microwave GE Profile convection oven, Berber Carpeting throughout, new flooring in kitchen and bathroom, fresh paint, new floor molding throughout, new lighting and high-end ceiling fans (one with a heater!), new kitchen and bath fixtures, new cabinet hardware in kitchen and bathroom, upgraded window in bedroom (double paned and tinted) and new Kohler toilet. Parking is underground, secured and gated

You call a 719 square foot one-bedroom apartment a "home"? Uh, okay.

Let's get right down to it: This guy bought into all the "the bottom is in!"/"the worst is over!" horseshit from the summer of 2008 and tried his hand at homeownership.

He failed miserably (not as badly as the 2005-2008 owner who lost about $80,000 when he sold to this guy) because just 14 months later he's trying to sell it...for a loss.

He initially tried to sneak in a bit of a profit and listed for $390,000 (probably based on this neighbor's September sale for $389,000 , but for whatever reason he wasn't as lucky). In fact, he was hit in the face with the frying pan called Reality and chopped $31,000 off the price.

At the reduced price of $359,000, his best-case-scenario will be a $20,000 loss including commissions and what he likely spent on cosmetic improvements (carpet, paint, outlet covers, baseboards, bathroom/kitchen fixtures and flooring--here is the old listing for comparison).

$20,000 in a year?!

But I thought Naples is Different(tm)?

However, given the 14 months of mortgage payments, a sale at this price will mitigate that somewhat.

But that's assuming he finds a buyer at this price. It's worth noting here that he's been stuck at $359,000 for two months now with no interest whatsoever. Zero. Zilch. Nada.

Although I think he has an outside shot at getting the current ask (Naples is a little different), another price reduction, given the time on the market, is inevitable. Which in turn spells disaster for his dreams of walking away relatively scot-free.

All evidence suggests he purchased this as an investment property and quickly discovered a "good investment" shouldn't bleed cash every month. Factoring in the tax advantages, he would have to charge $2,000 in rent just to break even on his mortgage!

Looking at nearby rents, he didn't come anywhere close to that and got absolutely pummeled by the monthly shortfalls. I guess he learned the hard way that Naples, although as prime as the number 101, ain't New York's Upper East Side when it comes to rents.

Hence, why he's jumping ship after such a short time.

Dude, what were you thinking buying this place? Did you even consult Craigslist for rental rates? If you had, you would have seen that two-bedrooms in Naples and Belmont Shore are well under $2,000 a month.

Plus, did you even consider who this apartment is for prior to buying? It's perfect for a retiree or a student, but neither of those groups can afford this place. And an individual (or couple, assuming they have no sense of personal space) pulling down the required $90,000 (and that's with a generous 4x gross income calculation) wouldn't be caught dead in this tiny (albeit tidy) place for $2,000 a month. Your pool of renters is quite narrow.

Instead of believing the perpetual bottom callers of CAR/NAR and CNBC, you should have been reading this blog. We could have saved you a lot of dough and heartache.

I have a feeling we're going to see a lot more of these failed "investments" in the near future as wannabe real estate moguls realize they're not alone. The sheer number of people clamoring for rental properties virtually guarantees further rent deflation due to overwhelming competition.

He's smart for trying to get out now instead of suffering through years of monthly bloodletting, but unless there is a miraculous Spring Bounce this guy could be in deep caca.

2004 Pricing in The Shore has Arrived

With the 2010 Super Summer Selling Season(tm) over before it began, sellers like this should be sweating enough bullets to fill Camp Pendleton.

210 SAINT JOSEPH Ave, Long Beach, CA 90803
Asking Price: $999,000
Purchase Price: $1,145,000
Purchase Date: 9/2006
Beds: 3
Baths: 2.5
Sq. Ft.: 2,343
$/Sq. Ft.: $426
Lot Size: 2,970 Sq. Ft.
Year Built: 1924
MLS#: Y1001993
On Redfin: 91 days
Description: Ideal Belmont Shore location situated between 2nd and Livingston Drive so close to stores/restaurants, Livingston Park and Playground, as well as in desirable Lowell Elementary and Will Rogers Middle School District. Not a short-sale or bank-owned property. Remodeled in 2006 with new Tile Flooring, Updated Kitchen with Granite Counters and Stainless Steel Appliances, Newer Stucco and Dual Paned Wood Windowns, Inviting 2-Story Entry with Staircase, Family Room with French Doors to Backyard with Patio and Grassy Area, Separate Office or 4th Bedroom, Sundeck of Master Suite, Vaulted Ceilings, Skylights and Formal Dining Room. Wonderful Master Suite with Large Private Bathroom featuring Spa-Style Shower, Travertine, and Whirlpool Tub.

"Windowns"?

"Sundeck of Master Suite"?

On a million-dollar listing? Way to give it your all, dipshit.

Given that the current asking price of $999,000 is firmly in 2004 territory and he has yet to garner any interest, you'd think the seller would be on the precipice of a massive panic attack, hammering his agent about making this listing tighter than an AARP member with a coupon and a tip calculator.

But, no dice. I guess it's only money, right?

And how much money are we talking about? Well, after "buying" this place for $1,145,000 in 2006, in March of this year he finally stopped pretending he could actually afford this house and listed it for $1,094,000. When that didn't work, he lopped off $51,000 like a plantar wart and here the property sits, unoccupied, casually waiting for a miracle from the Lord above.

May 25, 2010 - Price Changed $999,000
Mar 30, 2010 - Listed $1,094,000
Sep 11, 2006 - Sold $1,145,000 (+7.9%/yr)
Aug 20, 2004 - Sold $980,000 (+8.7%/yr)
Jun 24, 1994 - Sold $420,000

Assuming he could get the (soon-to-be-reduced) $999,000 asking price, the four years spent living the delicious lie that he was "rich" because he lived in a million-dollar house in Belmont Shore will cost him, at a minimum, -$206,000. According to the listing this is not a short sale, meaning that enormous loss will be taken directly on the seller's chin.

Yikes.

But that horrific loss is predicated upon this dude actually selling for a cool mil. It's worth noting that only two properties have sold for anywhere near that kind of money during the last six months.

But still, this place is located in the heart of The Shore and it appears to have many nice accoutrements of the Great Housing Bubble:


Although, what's up with this bathroom? Talk about a shrine to bubble exuberance!

I mean, is there any travertine left in that quarry?

The exterior is fucking hideous as far as I'm concerned, but to each his own.

WOOF.

Take a look at that nasty stucco job. Ugh.

We can debate appearances, but you can't argue with the market. And the market hath spoken: This thing is overpriced and every week that goes by without a price reduction serves to make that fact even more glaringly obvious.

If he were truly serious about competing for the few remaining cash-flush buyers out there, he'd aggressively slash the price and try to ignite a bidding war while he can. But for whatever reason he's just chillin', waiting gingerly as more negative economic factors weigh on an already severely challenged high-end market.

This is a great candidate for a walk-away. Think about it: the house has already been abandoned, there's absolutely no staging, the only price reduction occurred more than a month ago, he's already staring down the barrel of a $200,000+ loss...clearly there is no hurry to realize the horrific loss that would result from actually pricing it right. He's not worried about selling because he's already mentally checked out.

I can virtually guarantee one thing: if this guy moonwalks away from his debt-trap, the bank will foreclose and get it back on the market IMMEDIATELY. This seller clearly had a big down payment (remember, not a short sale), so the loss to the bank's balance sheet would be minimal. Given that, I very seriously doubt a lender would delay foreclosure or keep it off the market and play extend-and-pretend through the fall and winter months. Delaying foreclosure and encouraging squatting is typically reserved for houses waaaaaaaaaay underwater that banks don't want to take onto their books.

Some might point out that a sale within 5% of this sales price is possible. After all, on the face of it a 2004 price for generous square footage in a prime area sounds pretty attractive. And when you consider it sold in 2004 for $980,000 WITHOUT A SINGLE ONE OF THESE UPGRADES, $999,000 sounds like an even better deal.

The expired first-time homebuyer tax credits (Fed and soon State) wouldn't be a factor for buyers of million-dollar homes anyway, so selling this house on the open market relies solely on all-cash buyers or those who are comfortable with Jumbo financing. That's an awfully narrow field of potential buyers, but anything is possible in this crazy market.