REOdiculous

705 East 8TH St, Long Beach, CA 90813
Asking Price: $309,900
Beds: 2
Baths: 1.5
Sq. Ft.: 1,310
$/Sq. Ft.: $237
Lot Size: 5,000 Sq. Ft.
Year Built: 1918
MLS#: P733349
On Redfin: 2 days
Down Payment: $62,000/$13,000 FHA
Income Requirement: $70,000 (mortgage amount/3.5 = income requirement)
Monthly Nut: $1,700/2,000
Description: CHARMING CRAFTSMAN HOME BLENDS THE NEW WITH THE OLD. ORIGINAL BUILT INS AND WOOD FLOOR PLUS A NEWER BEAUTIFUL REMODELED KITCHEN AND SOME NEWER WINDOWS. THE FRONT PORCH HAS BEEN ENCLOSED FOR A LITTLE EXTRA SQUARE FOOTAGE. THERE IS A LAUNDRY ROOM WITH A DRPO DOWN IRONING BOARD AND 1/2 BATH OFF OF THE KITCHEN. IT SHOWS VERY LIGHT AND BRIGHT. LARGE BACKYARD COMPLETELY FENCED AND ON A CORNER LOT.

What the fuck is a "DRPO"?

About six weeks ago the bank took back this property for $238,169 and is now attempting to gouge buyers--ERRR...earn a substantial profit.

About $70,000 before commissions to be exact.

How does a bank convince itself that despite the fact nobody was willing to pay a paltry $238k ($182 per square foot!) on the courthouse steps, the market will somehow deem a $70,000 markup as a "deal" once it hits the MLS? I'll never understand that one.

Who knows...maybe the bank has it priced correctly for today's low-inventory, low-interest-rate environment. I think $309,000 is straight up Jocelyn Wildenstein crazy for this shite neighborhood, but given all the manipulation and interference in the market, it's tough to determine the true "value" of anything these days.

But let's give it a shot anyway.

Setting aside the obvious implication of the market already determining the value of this property at $238,169, let's look at the pricing history for clues:

May 03, 2010 - Listed $309,900
Mar 15, 2010 - Sold $238,169 (-14.0%/yr)
Sep 15, 2005 - Sold $470,000 (40.9%/yr)
Mar 03, 2005 - Sold $391,000 (10.9%/yr)
Feb 24, 1994 - Sold $125,000

Holy crap! This place once sold for nearly half-a-million dollars?! A year before the peak?!

Wow.

For some perspective, this testament to the idiocy of the Great Housing Bubble sold for a mere $125,000 near the last housing bottom. Now, given, it likely didn't have the upgraded kitchen and look as polished, but this place ain't that nice either (they couldn't even be bothered to upgrade all the windows. But, at least they have burglar bars on them! Bonus!) and it's fair to say it didn't nearly triple in value during the last 16 years.

If we remove the bubble and the crash and extrapolate a generous 4% appreciation rate (which, in this crime-riddled 'hood, is beyond generous) since 1994, today's value would be $234,123.

Hmm...that's weird. That's almost exactly what it sold for at auction -- aka the "value" determined by the market.

How about rent vs. own calculations? I defy you to find a comparable house in this area renting for $1,700 (or $2,000 if the buyer goes FHA, which, let's be honest, is exactly what's going to happen in this neighborhood). Hell, fully restored bungalows near Belmont Heights can barely get $1,700!

Listed comps? This is one of the most expensive listings in the area.

Local incomes? Try $27,375, about a third of what's required to stretch into this mortgage.

My point is, it doesn't take a whole lot of research to figure out this thing is overpriced.

And I realize some people prefer corner lots, but this location looks particularly miserable. This gets the worst of both worlds: A set of stop signs intersecting with a busy, stopless thoroughfare. You get the sounds of squealing brakes and post-stop launches combined with the sounds of cars and trucks hauling ass down 8th. Ugh.

Not to mention the inevitable T-bone accidents caused by the lack of a four-way stop. No thanks.

And click on the Street View and check out the dead grass on the sidewalk. If the city can't even bother to keep its grass alive, how reliable do you think the police patrols are in this 'hood?

Look, I don't blame the bank for trying to swing for the pricing fences. After all, they loaned out $470,000 (!) on this joint...why not try to alleviate the pain as much as possible?

But $309,000 seems woefully out of line with reality.

However, my brief house-hunting adventure this weekend proved it really is the Wild West out there. I stopped by a small fixer-upper on a tiny lot, in a decent neighborhood, which sold for about $360 per square foot in 2001. I wasn't that impressed, but other than the ridiculous asking price it had potential. Given the 185-day, stale-ass asking price, I was thinking about submitting a lowball offer.

Yeah, it just went under contract for $550 per square foot.

Did I mention it's a small fixer-upper on a tiny lot?

As the Shins once said, logic will break your heart. It's crazy out there. Choose wisely.

Toweer of Babel: FINAL UPDATE

Hey y'all, sorry for the lack of posts. I've been on the road since last week and this is the first opportunity I've had to check in.

Sold on 04/22/10 - $283,000

Without knowing what the interior looks like, it's tough to say how much the new owner overpaid. But even if he did overpay, who cares? He now has a place to call his own and can furnish it with the free government money. He's probably feeling pretty good right now and I'm not going to be the one to piss in his punchbowl.

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


1728 East 3RD St #3, 90802
Asking Price: $289,000
Purchase Price: $132,500 (10/1999)
Beds: 2
Baths: 1
Sq. Ft.: 910
$/Sq. Ft.: $318
Year Built: 1928
MLS#: P703419
On Redfin: 130 days
Income Requirement: $72,250
Down Payment: $10,115 (FHA)
Monthly Nut: $2,000 (yikes!)
Description: WOW!!! This fabulous historical Rose Toweers condo is three blocks from beach, trendy shops and dining and public transportation. This unit is downstairs and has wonderful hardwood floors, faux fireplace in living room, faces courtyard, has dining area in living room and kitchen and has great choice of colors throughout. The complex falls under the Mills Act because it is historical and is on the National Registry of Historical buildings. WOW. Just a beautiful and charming place. This is not a short sale or REO property

WOW!!! How the hell do you misspell "Towers"?

And I love this...

Property Features:
Window Bars

Bonus!

I really like the look of this complex. I can't explain it. It just looks to tranquil. Like a Mediterranean getaway.

But, you know, pink.

Which is why after reading that lush description I was excited to scope some photos. But, alas, this agent believes mystery is the best policy.

"has wonderful hardwood floors"? PROVE IT.

"faux fireplace in living room"? PROVE IT.

"faces courtyard"? PROVE IT.

"has dining area in living room and kitchen"? PROVE IT.

"and has great choice of colors throughout"? PROVE IT.

And since there are no interior photos, I'll cut right to the chase: today's featured seller, obviously emboldened by their strong equity position, has been leisurely chasing the market down for quite some time.

And by "quite some time," I mean SITTING ON THE MARKET SINCE TWO THOUSAND FREAKING FIVE!

Jan 19, 2010 - Price Changed $289,000
Nov 29, 2009 - Price Changed $297,000
Oct 19, 2009 - Price Changed $317,000
Sep 15, 2009 - Listed $329,000
Sep 21, 2008 - Delisted
Feb 06, 2008 - Listed
Feb 02, 2008 - Delisted
Aug 28, 2007 - Listed
May 05, 2006 - Delisted
Nov 04, 2005 - Listed
Oct 13, 1999 - Sold $132,500

That's right. Pretty much four years on the market! That has to be a record for the Long Beach Housing Blog.

Despite the eternity trying to sell for whatever chronic-fuelled figure was floating around in their delusional head, you do have to give the seller credit for finally getting serious late last year. Since September, the price has been slashed by $40,000.

However, reducing the price when you start out at a hilariously WTF number is like patting yourself on the back for quitting cocaine and heroin cold turkey...only to pick up a meth habit.

Considering this seller purchased pre-bubble for a pittance ($132,500), I understand how the allure of doubling your initial investment could cloud your vision and keep you from pricing too aggressively. I mean, you want to get your mitts on as much bubble profit as you can, right?

Unfortunately, that greed is preventing the seller from accepting the truth about today's market. Even with artificially limited inventory and fast-money subprime FHA loans, most overpriced properties just sit.

Especially pieces of crap. Which, let's be honest, this most likely is. I mean, how else can you explain the lack of interior photos? No realtor would be that terminally stupid to try to sell something for nearly $300,000 without a few pictures, right?

Honestly, I have no idea what this dolt is waiting for. Slash the price and get this thing sold, dummy! Anything you walk away with is pure, unearned bubble gravy anyway--why hang around for another year trying to get a few extra nickles?

Plus, this ground-floor unit doesn't seem very desirable. It has no stove, only one garage spot, two shared walls, and no laundry on the premises (sweet, two grand a month for the privilege of hanging out in a laundromat every Saturday). Take the money while this thing is still worth more than $200,000!

Look, rates won't be this low forever, the FHA won't stay solvent forever, first-time homebuyer ponies (likely) won't make it past summer, inventory won't remain this artificially low forever (well, actually, they might be able to drag it out for years, but are you willing to take that risk?)...WHAT THE HOLY HELL ARE YOU WAITING FOR?!

This may not be the ideal time to buy, but with all of the government incentives aligned just so, I can't imagine a more opportune time for the equity-flush to sell.

I Hate to Brick it to You: FINAL UPDATE

How did I miss this sale? One of the most hideous freaking houses in Long Beach actually sold last year!

In September 2009, I said:

Whatever the reason for his steadfast refusal to accept reality, assuming he hasn't refinanced to the high heavens, every single day that goes by without an offer represents another stack of bills he's leaving on the table.

It's over, pal. Cut the price, take the money and count your blessings. Otherwise, this fickle, ruthless market will brick your heart.

I'm happy to report that after nearly two fruitless years begging on the market, this seller finally took my advice. Last December he accepted a lowball offer of $865,000 for his four-bedroom chimney.

Considering the original pig-faced wishing price was an astounding $1,095,000, that represents a $230,000 realty-check.

Not to mention commissions, which ran another $50,000.

But don't shed a tear for this long-term owner. You see, during the last housing bottom they paid a paltry $350,000 , meaning they walked away with at least half a million dollars in appreciation (it doesn't appear they ran wild with refinances -- the tax basis is only $451,509 -- and they have 14 years of equity so they're probably walking with a lot more assuming no HELOC abuse).

Other than waiting too long to snap out of his denial and accept that lowball offer, costing them upwards of $100,000 in extra profit, he should be commended for finally getting it done and setting himself up nicely for retirement.

Other delusional Long Beach sellers, take note. There is hope for you yet.

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


257 Belmont, 90803
Price: $955,000
Beds: 4
Baths: 3
Sq. Ft.: 2,536
$/Sq. Ft.: $377
Lot Size: 6,150 Sq. Ft.
Year Built: 1931
MLS#: P675017
On Redfin: 227 days
Description: Sophisticated Tudor style 4 bedroom home with 2 1/2 baths, stunning hardwood floors throughout, formal entry, huge living room with gas burning fireplace wood beamed ceiling and corbels, formal dining room, breakfast room with built-ins, original door knobs, wainscoting throughout, 2 downstairs bedroom, inside laundry room, spectacular remodeled upstairs bathroom, large bedrooms, a secret playroom, basement, original kitchen with Wedgewood stove, 2-car garage and more. This property has so much charm and character throughout. A must see for the appreciative Buyer!

See the implication there? If you aren't interested in checking out this place or paying the million-dollar price tag, you're not an "appreciative Buyer" with a capital B.

So why don't you just run along to the welfare line and get some food stamps, ya worthless bum!

This has got to be one of the ugliest houses in the universe. And lucky us, it's right here in Long Beach!

While the exterior is odd (to be generous), the interior has some neat design cues and built-ins. However, when you're talking close to a million clams, it's really quite unimpressive (to everyone but the seller, that is).


The kitchen is absolutely BRUTAL. Don't stare for too long or you'll turn to stone. Or asbestos.

Anyhow, here we are after 227 days on the market with no sale. Por que, cabron?

Well, besides the severe deficit in the looks department and the lack of a discernible yard, there's one obvious reason why buyers--even "appreciative" ones--have flatly rejected this 4 bedroom chimney.

It starts with P and ends with E and isn't PEYOTE. Well, actually, peyote might be involved here, BUT the reason, as usual, is PRICE.

$955,000...227 days...

To borrow a phrase, There's nothing price can't fix.

Wanna see something neat?

Dec 21, 1995 - Sold $350,000

That seems like a pretty good deal for '95, given the location. And a damn cheap payment for the last 14 years! This dude should be nostril-deep in equity. Translation: If he dropped the price to a reasonable level, he would walk away with a trunkload of cash.

How's that price dropping going?

Feb 09, 2009 - Listed $1,095,000
Mar 17, 2009 - Price Changed $995,000
Jun 23, 2009 - Price Changed $955,000

Um.

"Glacially" is a word that comes to mind.

Of course, a glacier wouldn't last long in this house seeing as it's made of brick, has tiny windows, and no air-conditioning.

Maybe he HELOCed himself into the stratosphere, maybe for pride reasons he's resisting "just giving it away," or maybe it's yet another vanity listing and he really has no intention of selling.

Whatever the reason for his steadfast refusal to accept reality, assuming he hasn't refinanced to the high heavens, every single day that goes by without an offer represents another stack of bills he's leaving on the table.

It's over, pal. Cut the price, take the money and count your blessings. Otherwise, this fickle, ruthless market will brick your heart.

Time is Money: FINAL UPDATE

After 250+ days on the market and $200,000 in price reductions, Ted Kaczynski's toppled cabin finally sold for $985,000.

Interestingly, the sales price was just a shade ($50,000) higher than the 2005 sales price. Considering most properties selling in Long Beach are well into 2003 pricing, being able to sell for an '05 price speaks volumes to the stickiness of Naples.

Congratulations, Naples, you really are different!

Oh, wait.

It turns out the 2003 price was $925,000, meaning this dump in fact did sell for a 2003 price.

So much for stickiness.

Anyhow, the bigger point is that after commissions this seller pretty much broke even. Wow! That's such a rarity these days that I think it's worth congratulating.

Although five years of ownership without one red cent of appreciation is nothing to crow about, at least this guy, unlike most Long Beach sellers, was realistic enough to accept a lowball offer. And because of that, he didn't lose a dime and is now able to move on with his life.

Well played.

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

Address: 37 58TH Pl, 90803
Asking Price: $1,049,000
Beds: 3
Baths: 3.5
Sq. Ft.: 2,305
$/Sq. Ft.: $455
Lot Size: 2,396 Sq. Ft.
Year Built: 1923
MLS#: P693252
On Redfin: 177 days
Down Payment: $210,000
Income Requirement: $262,000
Monthly Nut: $6,700
Description: Check out this fantastic ocean and bay view peninsula home PLUS INCOME! Front house is a two story two bedroom two bathroom home. The entire second level is master bedroom with a giant ocean and bayview patio and enormous bath with a sauna! Rear building has a one bedroom and studio unit. Rents coming in at $2050/month. That offsets over $380,000 of mortgage at 5%!

It seems potential buyers have been checking out this "fantastic ocean and bay view peninsula home" for quite some time now. And yet a sale eludes this guy.

With photos like these, I simply can't figure out why. Check out this kitchen:

Magnificent!

I have to admit this view from that "giant" patio is incredibly impiressive:

The master bath ("with a sauna!") is also something to behold:

Absolutely stunning!

Or this shot of the two rental properties in back:

WOW!

The exterior may look like Ted Kaczynski's cabin fell over, but the gorgeous interior speaks for itself!

But, hey, cut this listing agent some slack--ever since the real estate market bottomed in 2007 2008 2009, he's been insanely busy. Selling as many houses as he does, as quickly as he does, means 177 days isn't nearly enough time to provide some photos.

Especially when you're only asking $1,049,000. I mean, a million bucks is small potatoes for a baller realtor like this.

And speaking of a million bucks, according to this incredibly savvy listing agent if you buy this property it will actually only cost you $669,000. You see, according to the listing description, "Rents coming in at $2050/month...offsets over $380,000 of mortgage at 5%!"

Well that's an interesting way to look at things! I guess banging hookers for the rest of your life instead of getting married offsets wedding costs, but I digress.

So, all you have to do is run a veritable boarding house and the price is magically slashed by $36%! [Of course, they might as well have calculated the offset "savings" at -111.1% because there's no way in holy hell you'll find a 5% jumbo loan today. The FHA's not even drunk enough to touch that one].

With a bargain like that, I'm shocked there has been no interest in this gem!

I mean, come on! The asking price has been slashed aggressively--down a whole 11% in six months. What a steal!

Dec 18, 2009 - Price Changed $1,049,000
Oct 14, 2009 - Relisted
Oct 09, 2009 - Delisted
Sep 25, 2009 - Price Changed $1,119,000
Jul 01, 2009 - Listed $1,185,000
Dec 14, 2005 - Sold $935,000 (0.5%/yr)
Aug 05, 2004 - Listed
Aug 29, 2003 - Sold $925,000

Interestingly, the 2003 owner was unable to capitalize on the rampant, batshit insane housing bubble run-up. A year after purchasing for $925,000, he tried to sell it. So far, so good--paint-by-numbers bubble flipping. But after 16 months on the market (remember, this is near the apex of The Great Housing Bubble! Studios with murphy beds never spent more than a week on the MLS) he sold to today's current seller for $935,000--a meager $10,000 profit. Not enough to cover even a fifth of sales commissions).

This place must be a real shithole.

The current seller, ironically, has fallen into the same trap as the previous one: He overpaid for an undesireable property, in an undesireable configuration (who the fuck wants to spend all that dough to be landlord to a bunch of other people while you live in a tiny-ass 2-bedroom?) in a very desireable area. No big deal...unless you have plans to sell for a profit someday.

Plus, I'm assuming since today's seller and agent are too ashamed to include any photos it's still a steaming dump inside, making a sale even more difficult.

Hell, even crazy-ass Epraisal and Cyberhomes refuse to buy into this "million-dollar-home" horseshit:

Eppraisal - $466,262 (low) $548,544 (mid) $630,825 (high)
Cyberhomes - $681,615 (low) $757,350 (mid) $870,952 (high)

LOL! It's obvious (to everyone but the seller) that he's in a race against time and cruel, frigid reality. The previous seller was lucky to get away with only a small loss after his colossal investment mistake, and I hope this guy is as fortunate.

Maybe 2009 will be remembered as the year we put the worst behind us economically, and '10 will be the year of recovery and a return to 10x income housing prices. Then, I imagine, it truly will be a happy new year for this seller.

The Impatient Inpatient

Asking Price: $1,599,000
1390 LOS ALTOS Ave, Long Beach, 90815
Beds: 4
Baths: 3.5
Sq. Ft.: 3,400
$/Sq. Ft.: $470
Lot Size: 0.33 Acres
Year Built: 1956
Community: Park Estates
MLS#: P704104
On Redfin: 210 days
Down Payment (30%): $480,000
Income Requirement (total mortgage/3.5): $320,000/yr
Monthly Nut: $8,000
Description: Totally remodeled showcase home with top of the line amenities throughout. This Kenneth Wing modern style home is practically brand new and features 4 bedrooms + additional office, 4 baths, and approx. 3,400 sq. ft of living space. Gourmet kitchen, granite counters, top of the line appliances & fixtures, bamboo flooring, remodeled baths, new windows, 2 fireplaces, central heat and AC, plus more! All rooms look outside to the beautifully landscaped yard with swimming pool making this home perfect for indoor/outdoor living. Perfect for entertaining with light/open floorplan and French doors stepping outside from most rooms. Rare, upgraded style in exclusive Park Etates neighborhood. All this on an estate sized lot. MUST SEE!

No, what people "MUST SEE!" is that nasty fire hazard of a roof on a $1.6 million house!

Yikes!

Looks like the mouth of a homeless candy aficionado.

And realtard: just a bit of advice. When trying to sell a house for $1,600,000, make sure you actually spell the neighborhood correctly. Unless Park "Etates" is some special Long Beach enclave I've never heard of, that's some bush-league stuff, son.

I am continually amazed by the mentality of fools who purchased in 2008 despite well-documented evidence of rapidly declining prices. I mean, what the hell were they thinking?

"It's a whopping 10% off the last sales price! I'd better snap it up before I get priced out forever...again!"

Well if it fell 10% in just one year, did you ever consider what would stop it from falling another 10%? Or 20%? What's your hurry, cupcake?

Plus, this impatient inpatient failed to consider what the sale price was in the transaction before last.

For this property, all this dummy needed to do was look at the public records:

Aug 22, 2008 - Sold $1,595,000 (-10.8%/yr)
Apr 03, 2007 - Sold $1,870,000 (+72.0%/yr)
Jun 02, 2006 - Sold $1,190,000

Fucking whooooooooooooooops.

Really, guy? You saw that 72% annual appreciation between 2006 and 2007 and thought a measly 10.8% discount from the peak price somehow made this a bargain?

Sir, I think you're too stupid to breed.

What's even more dumbfounding is that these 2008 buyers are just as clueless on the way out. Most of them have actually convinced themselves that despite 2008 not being anywhere close to the bottom, there are buyers out there ready and willing to bail them out of their eyes-bigger-than-their-wallet mistakes. Seriously, how many 2008 buyers have you seen that truly believe they won't lose a dime selling in 2010?

Newsflash, pal: WHEN YOU EVENTUALLY SELL, YOU ARE GOING TO LOSE YOUR ASS.

In case you haven't noticed, the two years since your purchase have been absolutely hideous as far as unemployment, price declines, and constricting jumbo lending requirements. Just how the holy hell do you think you're going to get out of this only paying commissions?

I'll never understand these idiots.

Don't get me wrong, this is a nice ass house!




Gorgeous.

Although, what's up with this photo? Is it just me or is the bed sticking out at a wonky angle?
What possible advantage could that provide from a layout perspective?

Whatever. Look, the debate isn't about whether this is a sweet property; it's about whether it can command $5,000 more than it sold for two years (and one housing crash) earlier.

After 210 days on the market at the same price, the answer is a resounding HELL NAH, SON.

To make matters worse, the location within the neighborhood is terrible. It's on a janky-ass lot which backs right up to busy-ass Bellflower. It doesn't matter how nice it is inside, just because you were dumb enough to pay top-dollar for a crappy lot location doesn't mean your potential buyers will be equally as stupid.

I hate to be the bearer of bad news but you fucked up. You paid too much too early in the crash, and the sooner you accept that, the sooner you'll be able to extricate yourself from this monstrous mortgage payment and move on with your life.

But dude, it's time to live in the now. You need to let go of your misguided, "break-even" wishing price and slash it by $100,000 tonight...and keep cutting until it sells.

Better yet, just take it off the market and enjoy living in this killer house. Oh that's right, YOU CAN'T. Because if you could actually afford this house in the first place you wouldn't be trying to sell for a $90,000 loss after commissions, would you?

HA HA!