Elephantine Vanity and Greed: UPDATE II

Remember this FSBO?

Days on Market: 633 days

After this much time, do you think he even remembers his apartment is still for sale?

Just goes to show, sanity is not a prerequisite for selling a house (or buying one, for that matter).

As I said in the first update:

Believe me, even years from now as condos are selling at 2001-2002 prices, these true believers will still be out there. Kind of like those Japanese soldiers stuck on remote islands, not realizing (or refusing to believe) that World War II had ended, continuing to fight the war decades after Japan's surrender. To some, denial is more addictive than the best heroin or crack that money can buy.

Mind your Bs and Qs

Address: 444 OBISPO Ave #104, 90814
Asking Price: $255,000
Beds: 2
Baths: 1
Sq. Ft.: 941
$/Sq. Ft.: $271
Year Built: 1966
MLS#: P712709
On Redfin: 44 days
HOA: $200
Down Payment: $8,925 (FHA)
Income Requirement: $64,000
Monthly Nut: $1,700 (FHA)
Description: $30,000 price reduction, the best price 2bedroom at Belmont Height. Very Easy to show, go DIRECT. Needs some minor work. Probate Executor is assigned & approved by the court. Only offer need to be submitted and court needs to approve it. First floor corner unit by the building pool. Walk to beach & 4th St. trendy Art Theater, wine bars & classic boutique stores. This tranquil unit features include an east facing living room with pleasant outlook, two large bedrooms with ample closet space, open kitchen, one specious bathroom with tub & separate stall shower & one parking space. Building features include nice pool, BQ area, backyard area, laundry room & small gym area.

"the best price 2bedroom at Belmont Height"?

There are at least three egregious errors within that tiny little half-a-sentence. Oy.

And a "specious" bathroom? You mean it's deceptively alluring or falsely attractive? You be the judge:

That description is an unholy mess.

And the interior doesn't seem to be much better:


However, even if this apartment does require "some minor work," it's approaching a decent deal at $255,000. With 20% down, the monthly nut would be around $1,500--which it could easily fetch in rent given the Bluff Heights location (once the minor work has been completed, obviously).

The solo parking spot, lone bathroom, and ground-level location (this could be preferable I suppose) are detriments, but at least you get a pool, small gym, and "BQ area" for your HOA dollars.

And given the size and speed of the price reduction (now undercutting a vast majority of recent sold comps), the seller clearly wants to get it sold. Which means you might be able to get an even better deal.

Probate sales always make me kind of sad. It's such a vulnerable, emotional position to be in. Luckily, the next of kin appear to be on the right track as far as pricing so there's no need to bash the hell out of the listing.

I don't have much else to add. Just wanted to highlight what could be a decent deal on a (small, outdated) Bluff Heights apartment.

Haiti: Every Little Bit Counts

http://www.redcross.org/

The Fail--ERRR...Fall Selling Season: FINAL UPDATE

Sold on 01/06/10 - $367,000 ($8,000 below the 70-day-old list price)

Boy, the government underwriting nothing-down, subprime FHA loans sure is working out well for sellers!

But, how's that working out for taxpayers?

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


1710 E Florida St, 90802
Price: $375,000
Beds: 2
Baths: 1
Sq. Ft.: 960
$/Sq. Ft.: $391
Lot Size: 2,560 Sq. Ft.
Year Built: 1920
MLS#: S593140
On Redfin: 5 days
Down Payment: $75,000
Income Requirement: $107,000
Monthly Nut: $2,100
Description: Nice cozy REO home with hardwood floors throughout, walk-in-closet in each room. BRING ALL OFFERS!

A for effort on that description, pal! But next time you should try being less verbose. I mean, 17 words is a little overwhelming for potential buyers.

And thanks for photos of the bathroom. Considering it's the only baño in the house, I'm sure buyers don't really care. Nah, they're probably much more interested in doing their toilet business outside. One look at that dead grass and it appears the previous owner did too!

Again, you know what it means when the bathroom (especially the only bathroom) isn't included in the photos: IT'S AN UTTER DISASTER, RIDDEN WITH MOLD AND PESTILENCE.

The pricing history is interesting. The 2004 buyer paid $396,000 (for this place? Yeef) and three years later managed to edge out a profit of, uh, nothing. After commissions, all he had to show for three years of ownership was a $5,000 loss. But hey, at least he was rid of his albatross and had already made it someone else's problem. Namely, the fool who believed this place was worth $420,000 in 2007.

Within three months he attempted to flip it. Two months after that he cut the price and began his downward spiral into the abyss known as the Great Housing Bubble Bust.

Oct 18, 2009 - Listed $375,000
Sep 21, 2009 - Sold $336,363
Aug 22, 2008 - Delisted
Aug 20, 2008 - Relisted
Jul 29, 2008 - Delisted
Feb 08, 2008 - Listed
Jan 16, 2008 - Delisted
Dec 25, 2007 - Price Changed
Oct 30, 2007 - Listed
Aug 01, 2007 - Delisted
Aug 01, 2007 - Sold $420,000
May 24, 2007 - Price Changed
May 13, 2007 - Price Changed
Apr 29, 2007 - Listed
Aug 17, 2004 - Sold $396,000
Jul 08, 1994 - Sold $60,000

The bank took it back in September for $336,363--ostensibly the remaining balance on the loan--and promptly hosed it down and plopped it on the MLS hoping to squeeze out a $38,000 profit.

Hello? Have you seen the neighborhood this house is in? If you had, you would seriously rethink your $391 per square foot demand.

As a reminder, for a buyer to realistically afford a $375,000 house, their household income would need to be $107,000! Not many residents are pulling down that kind of coin in this neighborhood, and if they are, they sure as hell aren't looking for a place like this.

Frankly, the bank should be ashamed of itself for this ridiculous asking price. It's simultaneously one of the most expensive houses around and one of the dumpiest.


This place is a wreck, with the only discernible upgrade being vinyl windows and a smattering of mismatched hardwood flooring. Any buyer will have to set aside a considerable amount of money each month to cover the deferred maintenance (it's obvious that none of the bubble buyers put much into this house) and the ongoing repairs on an 89-year-old house. Not to mention about $30,000 to make it a house worth coming home to.

Translation: There is no way in holy hell this makes investment sense (cents?) at $375,000. Not even close.

Oh well, I guess trying to gank a nice little profit was worth a shot. But as we enter into the slow sales season, I have a feeling it's going to take some considerable price cuts to move this thing. And if the lender doesn't act soon (guaranteed) then they're going to take a bath a second time.

Frankly, I think this lil' buddy has potential. But most definitely not at this price. Try half off.

Drawing a Blank

5585 East PACIFIC COAST Hwy #163, 90804
Asking Price: $200,000
Purchase Price: $100,000
Purchase Date: 6/2001
Beds: 2
Baths: 2
Sq. Ft.: 913
$/Sq. Ft.: $219
Year Built: 1970
MLS#: P688126
On Redfin: 236 days
HOA: $273
Down Payment: $40,000 (UPDATE: FHA unavailable in this building according to reader JK)
Income Requirement: $50,000
Monthly Nut: $1,300
Description: ...

No Description? Are you serious? I give realtors a hard time for taking hundreds of days to fix listing description typos, but you're too lazy to even write the description!

Oh, don't worry--it gets worse. Check out the other God-awful interior shots:


They look more like Rorschach tests than listing photos.

The history of this property sure is interesting:

Jan 07, 2010 - Price Reduced $200,000
Oct 14, 2009 - Price Increased $220,000 (price increase--smart!)
Oct 14, 2009 - Relisted
May 20, 2009 - Listed $215,000
Jun 11, 2001 - Sold $100,000
Jan 25, 1996 - Sold $92,500
Mar 31, 1995 - Sold $500 (WTF?)
May 30, 1989 - Sold $99,500

Of note, during the 12-year span between 1989 and 2001, this apartment only appreciated $500. Ouch.

But, the 2001 buyer (and current seller) lived through the bubble and saw "values," and his perceived equity, skyrocket. So in 2009, after eight years of ownership, he tried to cash in on that magical appreciation and double his investment.

After five months with no interest, he did what all smart Long Beach sellers do--he raised the price. I guess he conveniently chose to ignore the unprecedented housing implosion of the last two-and-a-half years. Anyhow, with this recent $20,000 price cut it seems he's finally woken up to reality.

Just for fun, let's also choose to ignore the unprecedented housing implosion when trying to figure out whether this is a decent buy. But, in fairness, I will also ignore the artificial, easy-money-fueled runup in prices during the bubble and calculate a flat (and generous) 4% appreciation rate for the last eight years.

$104,000 - 1 year
$108,160 - 2 year
$112,486 - 3 year
$116,986 - 4 year
$121,665 - 5 year
$126,532 - 6 year
$131,593 - 7 year
$136,857 - 8 year

Uh, yikes. At $200,000, this guy seems way overpriced.

And for those who would argue a present value of $136,857 seems too low in this "new paridigm" of real estate, well, I'd refer you to the State of California:

2008 Tax Basis: $138,067

However, as we've learned there is a vast difference between what something is truly "worth" and what someone with a subprime, no-skin-in-the-game FHA loan will pay for it.

So, although I believe $138,000 is about right as far as true value at the bottom, let's just look at the current asking price of $200,000 and objectively determine from a Rent vs. Buy perspective whether this is a good price.

The monthly nut, including Principal, Interest, Taxes, and Insurance/HOA will be roughly $1,300 with 20% down.

Asking rents are about $1,500 per month, so it appears this place pencils out (assuming they could get full asking rent and that rents don't deflate any further) if you go with traditional financing.

Well would you look at that!

This $200,000 price is only a few days old, so maybe it'll finally be enough of a price reduction to nab a sale. Good for them for dropping the price to what appears to be a reasonable figure. But...

WHAT TOOK YOU SO FUCKING LONG?

While you've been taking your sweet ass time ("I'm not going to just give it away! I'm entitled to my bubble equity!"), this is what happened to the price per square foot:

That's gonna leave a mark.

More bad news: You have competition. Another two-bedroom in this complex, which has been rotting on the MLS for 250+ days, claims to have a short sale approved for $200,000 (I won't even bring up the upgraded short sale asking only $159,000).

But, given the headaches associated with short sales, you're probably safe. With a 5-10% drop, I wouldn't be surprised to see this thing to go into contract very soon (whether it will continue to plummet in value--especially given its street-side location--is another matter altogether).