Wooden Teeth: UPDATE III

Since there is no new inventory to speak of, out of "Where Are They Now?" curiosity I've been revisiting past Long Beach Housing Blog properties. Although most RE in the LBC victims--ERRR...featured sellers have since pulled their properties after unsuccessfully pursuing insane wishing prices ("Well, I'm not going to just give it away!"), a few deluded soldiers continue marching on.

Like this idiot:

This dreadful piece of doodie is now entering its FOURTH YEAR on the market. The good news is that after more than 1,100 days of wholly ridiculous prices and slack-jawed market chasing, this dolt seems to be finally waking up to reality. To wit:

Jan 05, 2011 Relisted - $223,000 ($210 per square foot)

But take another look at the photos and ask yourself if $223,000 is even that great of a price for this shit hole. Even if it was asking $50,000 -- the 1981 sales price -- I still don't think it's worth it. In addition to the property taxes and insurance, you have to factor in the significant (and mandatory) teardown and rebuilding costs. But look at the shitty lot and horrible neighborhood -- is that really where you want to build your dream home?

Exactly.

Still overpriced.

At this point I'm beginning to wonder if any price would garner a sale.

But, thanks to foreclosure moratoriums and can-kicking HAMP HAFA HARP BARF FART programs, properties like these are about all we've got. Right now in Long Beach we literally have the cream of the crop as far as wildly delusional sellers. The chaff has already been separated from the market and now we're left with the real kooks.

It's like if you took a stadium full of Raiders fans and systematically began whittling them down:

"All fans who have completed high school or college, please leave the stadium."

"Okay, now everyone with a job please head home."

"Anyone with a credit score above 500 please head for the exits."

"All of those without criminal records, please disperse."

Imagine what you'd be left with! That stadium would be the scariest goddamn place on earth. And sometimes I feel like most of the current Long Beach sellers are those scary, unstable nutjobs.

Think about it:

Longtime owners with assets, equity and/or stable, fixed-rate loans (like this guy) don't need to sell, and so they won't. They pull their properties off the market and we never see them again (it may seem like a good thing to get fair-weather sellers off the MLS, but they are sometimes the most willing to deal because they have equity and will still clear a huge profit if they decide to get real).

Most ticking time-bomb mortgages already blew up and went back to the banks, but the few remaining with resetting and recasting mortgages are busy playing the loan-mod, extend-and-pretend lottery. They (like this moron) are most definitely distressed sellers, but they are not really on the market because they will game the system for as long as they can before their loans explode and they moonwalk away (or a miracle buyer bails them out of their foolishness).

As we all know, short sales are not actually for sale -- that inventory is technically on the MLS, but given the length of time it takes for banks to approve short sales (not an accident), you might as well check the "Exclude Short Sales" box on your Redfin searches (I sure as hell do). Short sales are just a way for banks to delay recognizing losses associated with foreclosure and prevent the property from falling apart (keeping a deadbeat in the place is better than letting it sit abandoned) in the meantime. Short sales (like this fool, at 481 days) may technically be on the market, but in reality they have left the stadium.

You can also disregard listings of those who overpaid during the peak but are gainfully employed. They are severely underwater but can still make their mortgage payment if they really stretch themselves. The tell is they ask peak pricing plus exactly enough to cover sales commissions (like this guy or this dummy), or they are juuuuust below their peak purchase price but after a few reductions have been stuck at the same price for months because further cuts would mean writing a big check at closing or becoming a short sale (like this dreamer). These house-poor suckers won't get anywhere near peak pricing, but they have no choice but to hope for a miracle because they're stretched too thin and have absolutely no room to negotiate. They are technically on the MLS, but they, too, have left the stadium.

So really we're left with only a handful buyers who actually intend to, and can (financially speaking) sell, who don't budge on price because they know they're in the power position, and a mob of delusional die hards at 500+ days on market (like this asshole), populating the MLS with their insane wishing prices and demands for nothing short of jackpot-sized prices.

It's a sad state of affairs out there. Realtors I've spoken to believe inventory will start coming back on the market in March (the "seasonal" thing never really made sense to me in SoCal -- sure, in Des Moines I get that people don't want to go house shopping in January, but it's 75 degrees in Long Beach! I would love nothing more than to check out houses on a day like today!). Sure, inventory might pick up in Spring, but the real question is: What types of sellers will they be?


I guess we'll find out.

What are you seeing out there?

+++++++++++++++++++++++++++++++++++
The price was "$299,000" and changed to "$269,000"

Days on Market: 911

NEVER FORGET!

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

Well, this is a fun way to start the new year:

The price was "$344,000" and changed to "$299,000"

By the way, this marks the THIRD YEAR on the MLS for this property. There are a lot of notable delusional greedtards in the LBC, but I think this guy, given that he paid $50,000 ages ago yet is still too dumb fucking stupid to price realistically ("I'm not going to just give it away!") and take the money and run, earns the Official RE in the LBC Eternal Shitbird Award:

I think it's especially appropriate given this photo:

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


732 N Washington Pl, CA 90813
Price: $344,000
Beds: 2
Baths: 1
Sq. Ft.: 1,064
$/Sq. Ft.: $323
Lot Size: 3,850 Sq. Ft.
Property Type: Single Family Residence
Year Built: 1905
MLS#: S514617
On Redfin: 630 days
Down Payment: $67,000
Income Requirement: $95,000
Monthly PITI: $2,100
Description: HUGE PRICE REDUCTION!!!Historical Craftsman w/loads of charm.Huge Formal LR,original features:hardwood floors,doors & hardware glass & brass doorknobs,kit with 'ice box' cabinetry,mosaic tile counter,coved ceilings,wrap around porch has been enclosed,orig sash windows,light fixtures,french doors.Oversized lot w/alley and street access.'Potters area off kit with washer and dryer hook-ups. Formal Dining room. 1 BR w/original built ins above closet, 2nd BR has double walk in closet. Bath has built in linen cabinet above tub. Tandem gar divided

"HUGE PRICE REDUCTION!!!"

JUDGING BY THE LOOKS OF THIS THING, YOU'RE GONNA NEED A LOT MORE!!!

Sweet mural. GONE!

Sweet kitchen. GONE!

No pics of the one bathroom, so you know what that means...GONE!

This realtor must have graduated from the Shaky McParkinson's School of Photography:



Really? 628 days to fix that shit and your potential buyers still get vertigo from viewing your listing? Clever.

The listing says "No Laundry in Unit" but that there are hook-ups in a "'Potters" area (a euphemism for "out-the-fuck-side"). That must be some kind of mistake.

Because there's no way someone is dumb fucking stupid enough to ask $344,000--nearly TEN TIMES the median income--in this awful neighborhood with no freaking laundry hook-ups in the house.

There's just no way.

Plus, the owners don't have a washer and dryer?! Just the hook-ups? Seriously, who the fuck lives here? The Swiss Family Slobinson?

But hey, at least it's got a "sleeping porch!" After viewing those interior photos, I think I'll take my chances sleeping outside.

This thing doesn't need fixing up, it needs a bulldozer.

This is a perfect candidate for Real Estate Intervention. The owner purchased this 104-year-old lean-to in 1981 for a paltry $50,000 ($47 per square foot, y'all!). In other words, with a 30-year fixed-rate mortgage, this dump should be paid off in a year and a half.

Considering the interest rate was 17.5% in '81, I'm sure this owner refinanced during the last 28 years. But the point is, there have only been three price reductions in nearly two years. Even with refinances they still must have a truckload of equity--why not just cut the price and walk away with stacks of bubble cash?

Nah, forget that. Just keep doing what you're doing. And by "doing what you're doing" I mean napping on your sleeping porch, washing your loincloth in the bird bath, and making drinking water from your pee.

Dwelling on the Past: FINAL UPDATE

A commenter mentioned a while back that this place finally sold.

Jan 2003 - Purchased $730,000
October 2010 - Sold $699,000

Looks like we're below 2003 prices even in Naples! Tough to even comprehend, given how Naples was supposed to be "special" and "immune," but this is indisputable evidence that the last eight years of equity for most homeowners has been completely wiped out -- even the "special" ones. Crazy.

So, a $74,800 loss after commissions. Not terrible, given what we've seen over the years. But we musn't forget the substantial improvements DJ Bankrupt spun into the property. If you recall, the house's condition in '03 was so decrepit that the agent described it as "once thought to be lost to neglect." And I guarantee the "meticulous restoration by the [now former] owner" cost him at least $150,000.

MINIMUM.

So now we're staring down the business end of a $225,000 loss. And the bank sure as fuck wasn't about to absorb it -- how the hell else do you think this short sale got approved so quickly?

So it looks like the bank agreed to forgive about 31 Grand in exchange for DJ Prolapsed Pockets kissing his massive, and incredibly foolish, investment goodbye.

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

Officially a short sale. Shocker.

But you have to congratulate this delusional twit on riding the Extend-and-Pretend Express for an astounding 228 days. Any bets for the date of the Notice of Default?

And in those 228 days his realtor hasn't even bothered to fix the typos...rats from a sinking ship.

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

5576 East VESUVIAN Walk, Long Beach, CA 90803

Asking Price: $799,000

Beds: 2

Baths: 1.25

Sq. Ft.: 1,200

$/Sq. Ft.: $666

Lot Size: 2,400 Sq. Ft.

Year Built: 1957

MLS#: P719642

On Redfin: 53 days

Down Payment: $160,000

Monthly Nut: $4,300

Income Requirement: $200,000

Description: The Opdahl Residence, 1957 by Edward A. Killingsworth, FAIA. With the use of two 18 ft. tall redwood walls at the setback lines on both sides of the property, Killingsworth skillfully created an oasis of privacy for the glass walled structure, reflecting pond & peaceful gardens within. Considered by the architect to be his most important work, the house stands as a prototype for building with limited space, & as one of the purest, most sophisticated examples of mid-century modern architecture. As the SoCal chapter of AIA noted in it's [SIC] honor award, 'there is poetry in it's [SIC] restrained vocabulary of material and form-a precise artistry'. Winner of eight prestigious architectural awards & featured in countless publications, the Opdahl house gave Killingsworth international acclaim. Once thought to be lost to neglect, a meticulous restoration by the current owner has brought the house back to it's [SIC] original glory. The property is now recognized as an historic landmark by the City of Long Beach.

Ugh, yet another seller getting high on his own pompous bullshit. This dude and his realtor are obviously quite impressed with their inclusion in Dwell, that hipster bible of aspirational pretentiousness.

When I saw this listing, I immediately thought of Unhappy Hipster

It's a blog that takes those famously dour Dwell photos and adds amusing captions. An example:

"The black hole had sucked everything out of the playroom. Save his sister or the coloring books? He made a split-second decision."

I'm a big fan of modern design, but the trust fund snobs in that magazine take it to a whole 'nother level. Sometimes the total commitment to uber-minimalism can be overwhelming, leaving you with these cold, bland, mono-hued drabscapes.

And this house is no different.

This place just feels so precious, so sterile. Every piece of furniture looks uncomfortable and terminally fragile -- almost like props. I half expect Chris Farley to barge in and crush every table and chair in the joint.

Whatever the opposite of "that lived-in feel" is, this is it.

I mean, these photos are just begging for the Unhappy Hipsters treatment. Here's my take:

"After waiting four weeks for his Air Jordan Sky Highs to arrive from Thailand, Toby was thrilled to debut them at Glenda's loft party. But despite subtle attempts to get people to notice his shoes, like pointing to Glenda's concrete floors and asking various guests if they supposed the finish qualified as 'honed,' nobody at the party acknowledged Toby's rare kicks. Would he ever recover from this slight, he wondered."

It's worth noting that Toby here paid $730,000 in January 2003. The listing description mentioned this property is a result of "a meticulous restoration by the current owner." Considering this place was, according to the realtor, "Once thought to be lost to neglect," I'm willing to bet he dropped at least $150,000 into restoration. Minimum.

Presumably to offset the steep commissions, he is asking $799,000. Even factoring in seven years of payments, the significant restoration efforts will virtually guarantee a massive loss.

I appreciate his pricing optimism, but things don't look good. There's just too much competition in this price range. I imagine someone, somewhere in the world would be impressed by an utterly useless "decorative pond," but in this bang-for-your-buck buyer's market will they be willing to pay a significant premium?

Seriously, does anybody but this owner give a farting fuck about the honor award from the SoCal chapter of the AIA?

Plus, half the appeal of this property is the decoration and rare furniture -- and the listing makes it clear none of it is included in the asking price (neither is the washer and dryer -- how generous! $800,000 and I gotta go out and buy new appliances?!)

So, remove the magazine-worthy staging and you're left with a small two-bedroom one-bath that needs tens of thousands of dollars in furnishings, artwork, and appliances asking (an ominous) $666 per square foot.

For that kind of money, I'd be more interesting in saving a boatload of cash and buying a larger, cozier place like this.

I suppose it doesn't have the architectural pedigree or "poetry in its restrained vocabulary of material," but in this post-bubble world, I can't imagine buyers really give a steaming crap.

I guess the seller, who is actually a DJ and co-creator of one of my favorite jazz bands, is hoping there are plenty of other overpaid DJs or trust fund babies or well-heeled mid-century design nerds out there with an equally lacking concept of value or money or investment strategy. But I have to imagine in this environment most buyers are looking for deals, not overwrought monuments to cheap credit and money-to-burn bubble exuberance like this.

Frankly, this place is so unique he might pull it off. He'll probably have to start playing Quinceaneras in El Dorado Park to survive the financial loss on his foolish malinvestment, but still.

Argonne, Baby, Gone: UPDATE II

Ugh.

This dummy is still around?

The listing says "77 days" but don't be fooled -- this thing has been begging for nearly a year with absolutely no interest. Tiny square footage aside, it's obvious that the rabidly delusional pricing is the primary cause of its long, sad tenure on the MLS.

The current wishing price is $595,000, a whopping $5,000 discount since we last checked in last March. Aggressive!

Anyhow, it appears the last realtor didn't work out (probably suggested lowering the price to, you know, actually get it sold...which is exactly what sellers afflicted with My Place Is Special Syndrome -- MYPISS -- don't want to hear) so the new listing agent, instead of doing some actual work, decided he'd just fire up MS Paint and fuzz out the Century 21 sign from the old listing photo:


HAHAHAHAHAHAHAHA!

Can you believe this lazy turd?!

Gee, with a consummate pro like that on your team, I'm positive you'll find that full-price buyer during the 2011 Super Spring Selling Season(tm). This year is your year, bro!

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

Happy St. Patrick's Day!

The price was "$610,000" and changed to "$599,999"

We're officially below what he paid in September 2008 -- just a scant year and a half ago. After commissions, this will represent a $37,000 loss. And that's assuming this piss-ant price reduction garners a sale.

The bottom was in 2008? HORSESHIT.

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

Welcome Patrick.net readers!

And thanks Anon for sending this property in.

309 ARGONNE Ave, CA 90814
Wishing Price: $610,000
Beds: 2
Baths: 1
Sq. Ft.: 883
$/Sq. Ft.: $691
Lot Size: 2,520 Sq. Ft.
Year Built: 1923
MLS#: P720288
On Redfin: 26 days
Down Payment: $122,000 (20% down)/ $24,000 (FHA, although the loan amount would just exceed the jumbo limit, let's assume you could get a gov't loan)
Income Requirement: $174,000
Monthly Nut: $3,300 (conventional)/$3,800 (FHA)
Description: Beautiful 'Turn Key'home [SIC] in Belmont Heights. Do not waste your time with Short Sales! Standard Sale here. Home boasts hardwood floors throughout home, NEW kitchen with granite countertops, wood cabinetry, stainless steel appliances, ceramic floor, bay window, recessed lighting, designer paint throughout and french doors to rear patio. An updated bathroom w/ ceramic tile and new plumbing. The garage has been completely finished with drywall, insulated, lighting, electrical & laminate flooring and offers you approximately 190 Sq. Ft of additional space for your office/gym with a french door entrance from the patio. New double paned windows throughout, new washer & dryer, new electrical/plumbing, new air unit & energy efficient water heater. Private patio offers you outdoor living room to entertain or enjoy secluded mornings/afternoons. .. Customized closets in bedrooms. Landscaped to be drought resistant. Award winning school district. Walk to the beach, Belmont Shore, Colorado Lagoon, golf course's [SIC] & parks.

Yet another 2008 loser!

Seriously, what were people thinking buying in late 2008? Don't they read this blog? I wonder if we'll be saying the same thing about 2009 buyers?

It only took this guy 18 payments before he figured out he couldn't possibly afford this place. And now he's looking for an out and is optimistically asking $9,000 more than he paid a year and a half ago, hoping to somewhat mitigate the pain of a -$28,000 loss (all in commissions).

This asking price seems based on the assumption that he perfectly timed the bottom in '08 and the housing market has been steadily recovering ever since.

I guess he doesn't read the news:

POW!

BIFF!

SOCK!

Yes, massive government intervention, artificially low interest rates, manipulated REO supply, extend-and-pretend HAMP tomfoolery, and free ponies in the form of first-time homebuyer tax credits have helped to stem the housing free-fall, but a slowdown in price declines is very different than an increase in values.

If you go from losing two quarts of blood per hour to half a quart, you're still losing a half a quart of blood! Slowing down the blood loss is very different from stopping the bleeding, mounting a full recovery, and being discharged from the hospital.

Unless he gets aggressive with his pricing very soon, our misguided seller could easily end up without a chair once the game of Government-Manipulated Musical Chairs comes to a grinding halt. I'd do whatever I could to sell now instead of taking my chances with higher interest rates, the elimination of homebuyer incentives, and more foreclosures on the market (and in the pipeline).

Once government attempts to keep home prices inflated (and, ultimately, unaffordable) run out of steam (or political support, or funding) and home values are allowed to return to some semblance of normalcy, sellers like this will regret not taking a big hit earlier. Because that "big hit" will look like what you find in the bottom of a clothes dryer compared to the massive loss incurred as a result of sticking to your guns and demanding a batshit-crazy wishing price in an worsening selling environment.

Peep the listing history:

Feb 03, 2010 - Listed $610,000
Sep 02, 2008 - Sold $601,000 (7.7%/yr)
May 23, 2008 - Price Changed $660,000
Apr 08, 2008 - Listed $695,000
May 26, 1993 - Sold $192,500

This dude probably thought he was getting a smoking deal in September '08 when he negotiated a 15% "discount" from the original $695,000 asking price. I bet he was quite proud of himself for "stealing it" for only $601,000 ($680 per square foot).

Hey, dummy, 15% off of something overvalued by 50% is still overpaying by 35%.

It's the Men's Half-Yearly Sale analogy: Nordstrom gives you a 20% off coupon and you go suit shopping. You find a tough-looking pinstriped Hugo Boss with a $1,000 price tag. After running the numbers you're thrilled to pay only $800. Wow, a $200 savings! I'd be stupid not to buy!

But you didn't do your homework. And you failed to notice the suit was $700 last week. You see, the night before the sale, the price was jacked up by 30%, meaning a suit that used to be $700 with zero discounts just cost you an extra $100 with a coupon. But, that doesn't matter because buying it on sale "felt" like a better deal. After all, the initial asking price of $1,000 was such a big number, $800 by comparison seemed like a more drastic "savings."

Realtors and home sellers similarly rely on Americans' complete inability to do math.

I know plenty of people who use peak pricing as the yardstick, and compare today's prices to that insanely lofty, easy-money-bullshit-fueled number to feel better about overpaying. What they should be doing is starting at pre-bubble pricing and comparing today's asking prices to that number. If more people did so, they would realize prices have a long way to go before they are in line with traditional home value appreciation.

Back to the property at hand: the lot is tiny but the location is great. The interior, although cramped, looks pretty nice too and the listing description mentions a decent amount of upgrades and goodies.

The solo bathroom is straight out of Scarface, but it's nothing a basic remodel couldn't fix. You know, because you'll have so much spare cash after making that $3,300 monthly payment.

HORF!

However, the backyard patio looks pretty cool:

And with only 883 square feet of living space, I'm sure you'll be spending quite a bit of time out there to offset the terminal claustrophobia.

I particularly like this photo of the junk accumulating the driveway:

For some reason, the first thing that came to mind was this:

What, you don't see it?

From what I can tell, little bungalows like this rent for around $2,000 a month. Let's be generous and say this could rent for $2,200 given the location and interior quality. So now you're paying $1,100 more per month (or $1,600 more if you go FHA) for "pride of ownership." Does that make any kind of sense?

Knowing that the bottom will arrive when the monthly rent approaches the Principal, Interest, Taxes and Insurance (there is debate about how to calculate this. Some say not to consider the tax refund because that money will largely be eaten up by maintenance and ancillary ownership costs. Others, mostly commission-based, suggest factoring in what you'll get back in tax refunds, which lowers the "buy" aspect of the rent vs. buy calculation and just happens to make buying more easily pencil out. I personally think the latter approach is dangerous because of the likelihood taxes, fees, insurance, and ownership costs will increase in the future given the impending state and federal fiscal issues), this asking price is way out of line with reality.

How far out of line? By (roughly) calculating pre- and post-tax monthly payments, in order for this to make sense as a purchase the price needs to be between $450,000 at the low end and $510,000 at the high end.

As you can clearly see, $610,000 for this snuff box is waaaaaaaaaaaaaaaay overpriced.

However, I am confident a knifecatcher will step in long before the asking price drops below $510,000, but I'm just pointing out what it would take to make any kind of financial sense and ensure you're not overpaying.

YNGFL: FINAL UPDATE

Sold on 12/17/2010 - $200,900

Wow. What a ride for this welted chunk of excrement.

More than 1,000 days on the market and the bank finally approved a short sale at the price it should have been at all along.

Just look at this lesson in incompetence:

Dec 17, 2010	Sold (MLS) (Closed)		$200,900	--	Inactive CARETS #P701097
Jul 31, 2010	Pending (Backup Offers Accepted)		--	--	Inactive CARETS #P701097
Jul 19, 2010	Price Changed		$199,900	--	Inactive CARETS #P701097
Jun 23, 2010	Price Changed		$219,900	--	Inactive CARETS #P701097
May 19, 2010	Price Changed		$225,000	--	Inactive CARETS #P701097
Mar 03, 2010	Price Changed		$250,000	--	Inactive CARETS #P701097
Dec 30, 2009	Price Changed		$289,000	--	Inactive CARETS #P701097
Dec 30, 2009	Relisted (Active)		--	--	Inactive CARETS #P701097
Dec 03, 2009	Pending		--	--	Inactive CARETS #P701097
Nov 12, 2009	Price Changed		$239,000	--	Inactive CARETS #P701097
Oct 30, 2009	Relisted (Active)		--	--	Inactive CARETS #P701097
Sep 23, 2009	Pending (Pending Sale)		--	--	Inactive CARETS #P701097
Sep 18, 2009	Price Changed		$249,000	--	Inactive CARETS #P701097
Sep 14, 2009	Price Changed		$270,000	--	Inactive CARETS #P701097
Aug 28, 2009	Listed (Active)		$319,900	--	Inactive CARETS #P701097
Aug 01, 2008	Delisted		*	--	Inactive CARETS #3
May 06, 2008	Listed		*	--	Inactive CARETS #3
May 06, 2008	Delisted		*	--	Inactive CARETS #2
Mar 30, 2008	Listed		*	--	Inactive CARETS #2
Mar 29, 2008	Delisted		*	--	Inactive CARETS #1
Feb 29, 2008	Listed		*	--	Inactive CARETS #1
May 25, 2004	Sold (Public Records)		$329,000	--	Public Records

Unbelievable.

In Saturday's post I mentioned that most Long Beach properties are selling for 2003 prices or lower, but that's in prime areas. In less desirable areas, like this one, the pricing is much closer to 2001.

Congratulations to the new owner for sticking it out for so long. Friends of mine just closed on a condo in Huntington Beach after TEN MONTHS spent wrangling with the bank. Because the bank was so slow to get off its ass, they missed out on the homebuyer tax credit and the record-low rates from the last few months.

But they, like this buyer, are paying less to own than it would cost to rent -- and that's cause for celebration.

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

The price was "$219,900" and changed to "$199,900"

$220 per square foot for an apartment just 1,000 feet from the sand. This is officially cheaper to own than rent -- even before the tax write-off.

But the bank has no intention of letting the property go for this bargain basement price. Because that would mean recognizing a horrific loss on the books.

So I expect this charade to go on and on and on...with a few price increases thrown in along the way to restart the process. It's been two-and-a-half years so far...I wouldn't be surprised to see this go on until 2012. As long as there are acronym-filled horseshit government programs left to exploit, this could go on indefinitely.

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

The price was "$250,000" and changed to "$225,000"

In case anyone is operating under the misguided belief that the banking system has stabilized and housing is poised for a big comeback, I want you to consider that this shitty apartment is still booked at full value on the lender's books -- despite the current asking price being$114,000 less than the 2004 appraised value.

As long as that bullshit is allowed by the government (and in fact actively encouraged by way of mark-to-fantasy FASB policies and various extend-and-pretend programs like HAMP, HAFA, etc.), it will take YEARS for this inventory to actually hit the market. Meaning, returning to true values (based on actual incomes and sizable down payments) will take ages.

I'm tired of waiting -- exhausted, really -- but I'm also no fool. If I could use Other People's Money, this would be a no-brainer. Buy now and walk away if things go south. But I have my own cold, hard cash on the line and as long as countless properties like this are still rotting on the MLS, the buy signal is a long way off.

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

The price was "$289,000" and changed to "$250,000"

Well that's one way to get buyers' attention! I guess now the question is whether the bank will actually let it go for nearly $100,000 shy of the original loan amount. I somehow doubt it. But maybe in light of the first-time homebuyer tax credit expiring, they're getting out while there's still some demand left. We'll see.

Sorry for the sporadic posts...I've been on the road all week.

Every time I travel I can't help but observe the local real estate situation. The last time I was in Miami was the summer of 2006, and as I drove around I remember marveling at the incredible number of construction cranes piercing the horizon. At the time I said to myself, "Who are these being built for? Is there that much demand for new housing or even rentals? How does all of this construction make sense?" From what I could tell, the completed towers seemed empty--why build more?

Anyhow, today the cranes are pretty much extinct but at night many of these new buildings were dark, reminiscent of the North Korea Towers in Irvine. Pretty crazy.

South Beach was still fun--it hasn't lost any of its swagger in this downturn.

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

Address: 1318 East 2ND St #9, 90802
Asking Price: $289,000
Purchase Price (2004): $329,000
Beds: 2
Baths: 1.75
Sq. Ft.: 909
$/Sq. Ft.: $318
Year Built: 1964
MLS#: P701097
On Redfin: 131 days
HOA: $156
Down Payment: $10,000 (FHA)
Income Requirement (4x income): $72,000
Monthly Nut: $1,700 (FHA)
Description: Sunny & bright, this lovely condo has tons of storage space, a spacious dining room and living room, a separate master bathroom AND A PRIVATE GARAGE with storage that is big enough for an SUV! The home has large rooms that make the entire condo bright and roomy. Located just 2 blocks from the beach, this is perfect as a second home, vacation property or a retreat to enjoy every day!

"perfect as a second home, vacation property or a retreat to enjoy every day"? Looks like this bathroom took a vacation to the 1960s:

HORF!

And when was the last time you saw a white refrigerator?

Maybe I've just become accustomed to stainless fridges, but for some reason that outdated clunker is really jarring!

Pssst! Wanna see the secret to selling a tiny, dumpy apartment with original bathrooms in a shaky economy? Here you go:

December 30: The price was "$239,000" and changed to "$289,000"

Genius!

This short selling grifter has been priced below $270,000 for the last 75 days (50 of which were spent begging for $239,000) with no luck, but for some insane reason decided what this listing really needed was a price jack to $289,000. Because there's nothing buyers love more than a good ol' fashioned cornholing.

Dec 30, 2009 - Price INCREASED $289,000
Dec 30, 2009 - Relisted
Dec 03, 2009 - Delisted
Nov 12, 2009 - Price Reduced
Oct 30, 2009 - Relisted
Sep 23, 2009 - Delisted
Sep 18, 2009 - Price Reduced $249,000
Sep 14, 2009 - Price Reduced $270,000
Aug 28, 2009 - Listed $319,900
Aug 01, 2008 - Delisted
May 06, 2008 - Listed
May 06, 2008 - Delisted
Mar 30, 2008 - Listed
Mar 29, 2008 - Delisted
Feb 29, 2008 - Listed
May 25, 2004 - Sold $329,000 ($270,000 puts it firmly in 2002 pricing--the true market value, judging by the failure to sell for $249,000 is likely 2000/2001)

What kind of sales strategy is that? To paraphrase a line from Tropic Thunder, When trying to sell a house, "everyone knows you never go full retard."

Because that's the only explanation for the current price. All the loanowner has to do is click on their own Redfin link to see that nearby properties are selling for nowhere near this amount:

Downtown: $243,000; $271 psft
Alamitos Beach: $225,000; $262 psft
90802: $249,000; $276 psft
Long Beach: $229,900; $256 psft

And here she is, demanding $311 per square! Based on what, honey?

Anyhow, the point of this post isn't about greed or stupidity, or the living hell of two shared walls, or the difficulties involved with short sales, or the insanity of sellers having negative equity after FIVE FUCKING YEARS OF OWNERSHIP yet simultaneously driving $45,000 luxury SUVs...

No. Although all are at play here, this post is really about pent-up foreclosures.

You see, this property is just two months shy of its two year (!) anniversary on the MLS. It's technically not "shadow inventory" because its been out in the open on the MLS, right? But given the lender's failure to approve a sale in 22 months, it has never actually been "for sale." Meaning it's a bank-owned property in denial.

A monster loss is guaranteed, it just hasn't been booked yet.

And after it inevitably goes back to the bank, it will come back on the market at a greatly reduced price (it seems that most times, once the loss has been realized banks just try to unload). However, REOs dumped on the market crush values, putting everyone else in the area (further) underwater and perpetuating the cycle. It makes perfect sense why lenders are intent on keeping these phantoms in real estate limbo for as long as they can.

And without a mechanism to force lenders to actually approve short sales and process foreclosures (read: recognize losses) instead of extending and pretending for eternity, the market will be absolutely surrounded by these phantom properties for years and years, with no opportunity to actually buy them.

If this seller were smart (ha!) she would have stopped paying ages ago and lived rent-free this entire time. If her lender isn't interested in selling short after two years, they certainly aren't keen on foreclosing.

Naples Nutter

The dearth of Long Beach inventory has made it really difficult to find properties worth featuring, but then I saw this outrageously overpriced pile of shit and just had to put it on the blog.

WISHING PRICE: $499,000
ADDRESS: 6150 East BAY SHORE Walk #10, 90803
BEDS: 1
BATHS: 1
SQ. FT.: 815
$/SQ. FT.: $612
YEAR BUILT: 1965
COMMUNITY: Belmont Shore/Park/Naples/Marina Pacific/Bay Harbor
MLS#: S640717
ON REDFIN: 15 days

HOA: $298

DOWN PAYMENT: $99,800

INCOME REQUIREMENT: $114,000/year

MONTHLY NUT: $2,800
DESCRIPTION: Beautiful sought after Alamitos Bay Shore Condo in the exclusive community of Bay Shore Yacht Club. This Bay front condominium features 1 master suite with upgraded kitchen and bath. Only 15 units in this secured building. Underground parking with storage unit. Elevator to the 3rd floor. Laundry facility onsite. Can watch the Naples Boat parade right from your Bay view balcony and front room. Low association. Rarely on the market. .. .so get you offers in fast!

$499,000 for an 815 square foot apartment.

$499,000 for an 815 square foot apartment with one bedroom.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry.

$499,000 for an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry, sporting kitchen counters and cabinets like these:

Good lord.

I mean, the fact that he shelled out for a fancy stainless steel oven and microwave but left everything else hideously intact (what, ran out of money for the matching fridge?) -- and then with a straight face claims this is an "upgraded" kitchen -- tells you pretty much everything you need to know about this seller's mental state.

And great news: those horrendous kitchen cabinets are continued in the bathroom!

Absolutely revolting. Shower doors and a curtain. I've never seen that. And I can't recall ever seeing such half-assed "upgrading." Embarrassing.

Again, I remind you, this asshole is asking HALF-A-MILLION DOLLARS.

That asking price would require the potential homeowner, at the very minimum, to make $114,000 per year to reasonably afford this place. You really think a single person or retiree sitting on that kind of loot would seriously consider putting it into this festering wound on the anus of the MLS?

This pricing makes absolutely no sense. The most expensive nearby one-bedroom to sell during the last six months was for $290,000. Given, it wasn't right on the water or in this stellar location, but that's not the point. Do these mongoloids truly believe their shit box is really worth another $209,000 because it's in this particular building?

I guess the question's in the answer, isn't it?

The only comp I could find for the building was a smaller unit with a similarly nauseating kitchen and bathroom that sold last summer summer for a measly $327,000.

Anyone think after viewing the interior photos of this lumpy, low-end yawn box that it deserves a $182,000 premium over that comp?

Really?!

His proximity to the water is clouding his judgment. The fact is, no matter where this building is located this is an 815 square foot apartment with one bedroom in a 45-year-old building with community laundry, sporting kitchen counters and cabinets like these:

It's worth noting that this place was purchased for $385,000 in 2005. Given that the vast, overwhelming majority of Long Beach properties are selling for 2003 prices or lower, this asking price makes even less sense. Their little-r realtor is clearly doing nothing to encourage a realistic asking price, so here we have yet another delusional Long Beach seller clogging up the MLS and wasting everyone's time. If he, for whatever reason, had to lower the price to a level that would actually garner a sale, he'd be lopping off, at a minimum, $150,000 just to get the bidding started.

What do you think, given what you know about this seller thus far, the odds are of that happening?

And the fact that the market-clearing price for such and undesirable property (in a highly desirable, yet lightly traveled by buyers, area) is in reality so much lower than the current asking price highlights the worst part of this whole situation: Because he waited too long to put it on the market, he now has zero room to negotiate. He painted himself into a pricing corner.

And now, unless he wants to write a check to the bank at closing, his only choices are leaving it on the market hoping for a miracle, or tucking his tail between his legs, taking it off the MLS and gritting his teeth every time he makes his roughly $2,200 payment for the next 25 years -- knowing full well that he could rent the very same place for considerably less.

So given those crappy options, why sell in the first place? I'm sure some of you noticed that a 5-year Adjustable Rate Mortgage would have reset and recast earlier this year, making the ability to keep up with that hefty payment considerably more difficult. Coincidence?

Nah, couldn't be.