A Man's Sport

After reading some recent posts, a dear friend noted that I'm awfully negative and really bash the hell out of sellers. I tried to defend my position and explain that delusional sellers put themselves out there for ridicule and that harsh treatment by yours truly is not only well deserved, but necessary.

I mean, imagine if there weren't countervailing voices out there? Buyers (especially those in Long Beach, which is a seemingly forgotten real estate market--largely devoid of newspaper coverage) might get suckered into a financially perilous situation, as so many former "owners" did when they listened to biased, one-sided, commission-driven, largely unchallenged horseshit like "they're not making any more land," "we're definitely at the bottom" and "prices always go up."

I thought I had recently lightened up--especially since the early days of the blog--there was some real venom in those days--but from his outside perspective I was still oozing with negativity. So from now on I promise to be more positive.

Well, actually, I promise to be more positive after today. Because...

WOULD YOU LOOK AT THIS GREED-FACED, MONEY-HUMPING, KOOL-AID-MAINLINING, GOLDBRICKING SHIT BIRD?

261 GRAND Ave, 90803
Beds: 2
Baths: 1
Asking Price: $639,000
Sq. Ft.: 968
$/Sq. Ft.: $660 (!)
Lot Size: 3,696 Sq. Ft.
Year Built: 1919
MLS#: P701487
Source: SoCalMLS
On Redfin: 85 days
Down Payment: $127,800
Income Requirement (4x income): $160,000
Monthly Nut: $3,500
Description: 2 bedroom, 1 bath + office; Remodeled 2009 Modern Craftsman Style home on a quiet street in Belmont Heights, 1/2 Mile to the Beach. Exterior features include, custom paint work, new window screens, newly painted porch, easy to maintain landscape, Custom Dual Pane Front Glass, Custom made front/back screen doors, Beveled glass added to front/back door. Timed sprinkler system and Malibu lights to show off this great exterior!Interior features include, refinished hardwood floors, new electric system to include recessed lighting, dimmer switches, TV swivels, ceiling fans and Custom Wiring for your Entertainment Systems. Architectural styles preserved; rebuilt china hutch, closet doors and molding. Bathroom features include new copper plumbing, Body Wash Sprayer Shower & new tub with Air Bath System. Kitchen upgrades include custom made crown molding , Under mount lighting added, Frosted Kitchen Panel glass and Glass Tile Back Splash finishes this beautiful kitchen.

He's got a set of brass balls attempting to sell in this environment for such a precious sum, I'll give him that. This System of a Down lyric immediately came to mind:

I play Russian roulette everyday, a man's sport,
With a bullet called life, yeah mama called life,(sugar)

It's always a bad idea to have the most expensive (second-most, in this case) listing in a given area, but that didn't stop this guy:

	$425,000 3422 VISTA St	0.2 miles 2 bd / 1.75 ba 850 Sq. Ft.
	$589,000 3626 East VERMONT St	0.25 miles 2 bd / 1 ba 1,180 Sq. Ft.
	$459,000 3601 East 6TH St	0.46 miles 2 bd / 1.25 ba 1,028 Sq. Ft.
	$579,000 325 PROSPECT Ave	0.47 miles 3 bd / 2 ba 1,100 Sq. Ft.
	$450,000 3034 East BROADWAY	0.47 miles 2 bd / 1 ba 864 Sq. Ft.
	$409,000 4512 East VERMONT St	0.54 miles 1 bd / 1 ba 888 Sq. Ft.
	$749,000 273 ROYCROFT Ave	0.57 miles 2 bd / 1 ba 1,200 Sq. Ft.
	$529,000 4437 East 6TH St	0.65 miles 2 bd / 2 ba 1,044 Sq. Ft.
	$435,000 781 ROSWELL Ave	0.73 miles 3 bd / 1 ba 902 Sq. Ft.
	$379,000 760 FREEMAN Ave	0.76 miles 2 bd / 1 ba 1,030 Sq. Ft.

Mind you, during the last six months, nothing has sold for anywhere close to $639,000. Not by a long shot.

	$505,000 372 GRAND Ave Sold on Nov 18, 2009	0.26 miles 2 bd / 1 ba 1,006 Sq. Ft.
	$390,000 3637 East VERMONT St Sold on Jun 05, 2009	0.28 miles 2 bd / 1 ba 888 Sq. Ft.
	$460,000 3226 East VISTA St Sold on May 31, 2009	0.32 miles 2 bd / 1 ba 924 Sq. Ft.
	$451,000 537 TERMINO Ave Sold on Oct 30, 2009	0.45 miles 2 bd / 2 ba 937 Sq. Ft.
	$410,000 615 LOMA Ave Sold on Oct 06, 2009	0.48 miles 2 bd / 1 ba 1,068 Sq. Ft.
	$451,800 627 LOMA Ave Sold on Aug 08, 2009	0.5 miles 2 bd / 1 ba 1,088 Sq. Ft.
	$486,000 602 CORONADO Ave Sold on Nov 03, 2009	0.53 miles 2 bd / 1 ba 1,134 Sq. Ft.

So what was this guy thinking coming on the market at a belief-suspending $660 per square foot?

"I'm special," that's what.

Don't get me wrong, this is a nice house in a great neighborhood. It features every flipper accoutrement, including granite, (too much) tile work, stainless appliances, hardwood floors, and crown molding. I think it's a bit over-upgraded and looks too much like a paint-by-numbers flip job, but the fact remains you wouldn't need to put one thin dime into this place. And for that he deserves a premium.



But he's been rotting on the MLS for nearly three months with no price reductions--the calling card of someone with a case of Greedfluenza (Swine Fool?).

And speaking of pigs, you can slap on as much lipstick, mascara, and rouge as you want, but it's still only a 2-bed, 1-bath plus office crammed into 968 square feet. Do whatever you want to spruce up and upgrade a property, but the one thing you can't do is make it bigger.

And how about a picture of the front of the house? 16 photos and not one shot of the curbside view? Really?

This seller purchased in March 2008 for $605,000 (after the property had spent nearly a year on the market). After putting some work into the house (the listing from the 2008 sale shows the kitchen, patio, backyard, interior paint, and hardwood floors had already been upgraded), it went on the market this September for $639,000.

Some might say 17 months is a long timeline for a true "flip," but it's clear this person never really intended to live here long-term. Or at least could never afford to.

I have no idea how much this guy put into upgrades, but it's safe to say that after commissions he will be staring at a big, smoking crater in any bank account reserved for anticipated profits.

And that's assuming he can find a buyer for this crazy, please-someone-come-along-and-answer-my-prayers-for-breaking-even-on-my-horrendous-malinvestment asking price.

This thing is way overpriced. Or maybe I'm missing something about this property? What I do know is that the average price per square foot of sold properties in 90803 is about $470.

Is this place worth an extra $190 per square foot? Only the market knows for sure, but I'm going to say no.

What I find most interesting is this house sold for $515,000 in 2003, before all the upgrades. For '03 that's a lot of money for 968 non-upgraded square feet!

As you know I love these little bungalows. But some sellers are straight up smoking Plymouth Rocks if they think they can get these insane prices.

Long Beach Loses Out

Via curbed la and District Weekly, Tesla has chosen Downey over Long Beach to manufacture the new four-door electric Model S.

The highlight:

But while Downey’s city officials were united and aggressive in their pursuit of Tesla’s enigmatic CEO Elon Musk, the City of Long Beach—particularly Mayor Bob Foster and city management—was accused of being difficult and nearly indifferent toward the possibility of a manufacturing plant that is expected to bring between 1,000 and 1,200 jobs to the area.

In fact, it was Musk who most strongly voiced that criticism, telling LBReport.com in an August 16 interview that “if the behavior of city management and the Mayor were the deciding factor, Long Beach would definitely not win.”

In that same interview, Musk said Councilwoman Gerrie Schipske was “the first and only call” to him personally and confirmed her internet journal (blog) dispatch to the effect that his company’s staff came away from meetings with other Long Beach officials “thinking that Long Beach actually didn’t really want us there and would much prefer the movie studio.”

Nice work!

It would have been nice to have those 1,000+ jobs in our beloved LB. Sad.

Daily Nut Job: UPDATE

The list price was "$809,500" and changed to "$629,000"

Quite a discount!

I'm back, but delirious from the jet lag. What did I miss while overseas?

Omakase

The good news: I'm going to Tokyo!

The bad news: No RE in the LBC posts for two weeks.

I'll try to drop in and update you with my assorted shenanigans. And a special thanks for those of you that wrote in with tips. I'm going to do my best to see and do as much as I possibly can.


Best Wishes,

-el bee

Daily Nut Job

4422 East 2ND St, 90803
Price: $809,500
Beds: 2
Baths: 1.75
Sq. Ft.: 1,737
$/Sq. Ft.: $466
Lot Size: 4,373 Sq. Ft.
Year Built: 1954
MLS#: P702474
Source: CARETS
Status: Active
On Redfin: 56 days
Down Payment: $162,000
Income Requirement: $231,000
Monthly Nut: $4,400
Description: Great Belmont Shore/ edge of Heights Home! Original Hardwood floors throughout! Great floor plan with open living room that leads to dining room. Plus large Den that could be used as office or extra living room! Separate laundry room easily accesible off of kitchen. Covered patio with spa with plenty of backyard to spare. Additional side yard great for dog retreat or any retreat for that matter! Plantation shutters in living room with fireplace. Bedrooms are extremely spacious. Keep as one story home or add second story for full view of the shore and the ocean. Location is ideal; end of 2nd street while at the edge of gorgeous Belmont Heights!

You know what, for once I think this seller can get away with calling it "Belmont Shore." Most sellers try in vain to claim the nearest nicer neighborhood, attempting to glom off the higher values--but I think this guy is being unecessarily precise with the "edge of Heights" thing. Dude, you can claim the Shore. It's okay.

Whether it's the Heights or the Shore or whatever, there is little debate that this is a prime neighborhood. Which begs the question: If the nabe is so wonderful, then why the Ghetto Gate (to borrow a term from FreedomCM) on the front door?

Yikes! Judging by the absurd asking price of $809,000 for this dump, I'd say it's not so much to keep undesirables out, but to keep the batshit crazies in.

Let me just say, unequivocally, that there is not enough government intervention or free ponies in the world to make this a good deal. Sorry. It doesn't matter how great the "Belmont Shore/ edge of Heights" area is, the lot is horribly, horribly located.

Check out the Aerial View on the listing and marvel at how the property not only sits right atop busy-ass Livingston, but ALSO gets the noise of the 2nd Street/Ximeno four-way stop (two of which are downhill, requiring harder stops)!

Ass-loads of traffic noise + weirdly shaped lot + no yard to speak of = Mondo Undesirable.

On top of that, when I went by last night I noticed it's flanked by two, two-story apartment buildings on either side.

Plus, IT'S ONLY A TWO-BEDROOM! For $810,000?! Really?

Hell, not even the pollyana uber-optimist dreamweavers at Zillow.com can muster up the strength:

$598,080(low); $712,000 (estimate); $776,080 (high)

Even their "high" estimate, which connotes a truly amazing property that's in spectacular shape and fully upgraded, is $33,420 lower than this nutter's asking price.

Does this look "truly amazing," "in spectacular shape," or "fully upgraded" to you?

What a fucking joke!

Speaking of jokes, here's a little listing history for that ass:

Sep 09, 2009 - Listed $809,500
Aug 15, 2001 - Sold $460,000 (+17.3%/yr)
Oct 28, 1999 - Sold $345,000 (+15.4%/yr)
Apr 26, 1996 - Sold $209,000

Look how dirt cheap this joint was during the last housing bottom! And anyone who needed proof that the bubble started before 2001 should take a gander at the difference between the 1996/1999 and 1999/2001 sales prices. Boo-ya!

So, considering our seller purchased for $460,000 eight years ago and the deplorable condition of the house, just how the hell did he come up with an asking price $349,500 more than what he paid?

The same reason people hoard cats, I would imagine.

Because even assuming this hovel appreciated at a (very generous) 4% per year since purchase, this dusty dung button would be worth--at most--$629,500 today.

And considering not one dime went into upgrades, I simply fail to see how this asking price is justified. I guess someone might be interested in it as a teardown, but the lot price is too expensive. I mean, take another look at the interior!

Halloween's over, guy. Stop scaring the kiddies!

I'm really looking forward to seeing what the inevitable price cut amounts to. This seller has tons of equity (assuming he didn't cash-out refi to the hilt) so he can afford to be aggressive. But I have a funny feeling the voices in his head will convince him his place is "special" and we'll have a LOOOOOONG time to ponder how people still exist that haven't heard about the collapse of the greatest housing bubble in history.

Made in the Shade: UPDATE

The list price was "$995,000" and changed to "$875,000"

Wow! Quite a price reduction!

But before you get too excited and start thinking he suddenly found religion and will start pricing aggressively, it took him four long months to make this much-needed cut. In the grand scheme of things this reduction doesn't mean anything. All it means is the property was $120,000 overpriced.

This jackass is less than a month away from his one-year anniversary on the MLS. That's a scarlet letter ("S" as in "Stale") any seller should fear. You think he'll wake up in time to beat the clock?

Considering it took 340 days to get to a somewhat realistic price, I'm going to go out on a limb and say...

Happy Anniversary, Numbnuts.

*****************************************


16 12Th Pl, 90802
Price: $995,000
Beds: 2
Baths: 3
Sq. Ft.: 2,056
$/Sq. Ft.: $484
Lot Size: 2,915 Sq. Ft. (yikes!)
Year Built: 1904
MLS#: P666834
On Redfin: 254 days
Down Payment: $200,000
Monthly Payment: $6,100 (@ 6.5% jumbo)
Income Requirement: $285,000
Description: $200,000. PRICE ADJUSTMENT!!! This one of a kind Alamitos Beach Bluff home has the location and views you've been wanting! It has an updated kitchen and breakfast bar with top-o-line Starmark European maple cabinets,bamboo flooring,recessed lites and S/S appliances.The large formal dining room and open living room lead to the patio overlooking the beach for your morning coffee or brunch. The large family room with recessed lites and crown moulding leads to your own private rear yard with new hardscape and landscape.The inside laundry room with premium washer, dryer and sink off the kitchen also has a upgraded 1/2 bath. The upper level off the foyer has two large master suites with walk in closets,berber carpet, ocean views, top-o-line Hans Grohe fixtures in the upgraded baths and a sun porch. This home has too many upgrades to mention.... a must see for your fussy clients! CLICK ON MEDIA 21 OR MAIN PICTURE TO ACCESS VIRTUAL TOUR AND PICS.

Boy, for a house "at the water's edge," you would think the realtor would be smart enough to include shots of that glorious ocean view.

Wanna know why she didn't? Because there isn't one.

Weren't you beginning to wonder why the exterior shots looked a bit, um, shady?

Well, it's because this house, with only two bedrooms on a cramped lot, is completely surrounded by enormous apartment buildings and a parking structure. Engulfed might be a better word to describe how deep in the shadows this house is.

Do yourself a favor and click on the Redfin listing and check out the Aerial View. DOH!

And is it just me, or does it seem like every "Cape Cod" homeowner has a graduate degree in Application of Clutter as Home Decoration?

To give you an idea of just how greedy and delusional this seller is, the original listing price in December 2008 was a laughable $1,400,000. After four months with no interest, they relisted in April 2009 (presumably with a different realtor who promised vastly more bubble profits) with an unbelievable $1,700,000 price tag.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

Idiot.

They are obviously convinced the proximity to the water is worth big bucks. But I have news for them: With no actual view of the ocean, that's like Rachel Bilson being your girlfriend online.

Or living near the most scenic point of the Grand Canyon--in a windowless mansion.

Great in theory, but about as useless as braille on a Harley Davidson owner's manual.

So, the current asking price of $995,000 represents a $705,000 fall from grace--ERRR, wake up call--ERRR, reality check--ERRR, discount from the highest asking price.

Jul 17, 2009 - Price Changed $995,000
Apr 07, 2009 - Price Changed $1,200,000
Apr 07, 2009 - Relisted ($1,700,000)
Dec 18, 2008 - Delisted
Dec 02, 2008 - Listed $1,400,000
Sep 06, 2002 - Sold $459,000
Oct 20, 1998 - Sold $300,000
Nov 22, 1996 - Sold $255,000

Dang, can you believe this place sold for $255,000 during the last housing downturn? Sheesh.

The crazy thing is, the 2002 purchase price of $459,000 means if this seller just priced realistically, he would walk away with a pallet full of cold, hard cash. Assuming he didn't HELOC himself into the stratosphere, that is.

But given the costs associated with "too many upgrades to mention," all bets are off.

Good Deals

Mike in LBC writes:

El Bee,

Is there anywhere on this blog site, where you throw out a couple steps to follow, for noob real estate dummies like me, to see if a property is a good deal? What steps do you take, when you want to see if a property is a good deal?

And this is just a suggestion, but I would really like to see you find a property that you think IS a good deal, and maybe tell us why, and how to find them.

My permabear permafrost has thawed considerably this year, and I'm not afraid to tell my readers when I think something is approaching a decent buy. The reason I don't feature more "good deals" on this blog is because, frankly, the few that exist don't last long on the market. And for good reason. In fact, sometimes I'll have a finished post in the can only to discover the property sold before I could publish it.

And with all of the government intervention (whatever you think about all the taxpayer cash being dropped from B-2 bombers, you have to admit it seems to be working as far as spreading the pain gradually instead of the precipitous equity-destroying tailspin we saw in 2007-2008) it's even more difficult to determine what the "real" value of a property is.

I think everybody's biggest fear is that they will put all their hard-earned money into purchasing a house, only to watch the value plummet immediately.

But why is being a little bit underwater such a big deal? Sure, nobody likes to think they paid too much for anything (just listen to people brag about the "deals" they get on car purchases and how they "raked that salesman over the coals"--you don't often hear about the people that got home only to realize they got cornholed on the "clear coat protection"), but assuming you bought a house you love (or at least see yourself in for a decade) who really cares about timing the bottom perfectly?

The real question is: If you buy today will you be more than "a little bit" in the red a few years down the road?

I can't tell the future. Anybody who claims they can is certifiably full of it.

But what I can tell you is if the Superbears are waiting for $99 per square foot in coastal Long Beach, you'll be grousing about "unsustainable" home prices until you're living in a home staffed with nurses. I don't want people to hang their hat on a "tsunami" of REO properties flooding the market and crushing prices. I just don't see that happening anymore. What incentive does the government have to force banks to release their inventory?

I also don't want buyers to pin their hopes to rising interest rates bringing values down. First, we don't know for sure that that will happen. The conventional wisdom is that higher rates equal lower values because people can't finance as much, but what if as rates rise more people jump in before rates get out of control, thus raising home prices? Then what? Second, do you really think the goverment is going to let that happen?

Look, I'm still pretty bearish, but I have to say the incessant doom and gloom is getting old (if the Mad Max theorists are correct, our currency will collapse and blogs like this will be pointless. All property without tall gates will become worthless and we'll be scrounging for water and ammo and won't give a crusty crap about granite countertops). Because although some delusional sellers set "Wishing Prices" I think some permabears are holding out for unrealistic prices. Just like those idiot sellers are never going to get $900,000 for that 1 bed/1 bath with ocean views, you're not going to get it for $90,000.

Housing in Southern California is expensive. It always will be. The maintenance alone will ensure that. It's a luxury item, a consumable. And just like there is a reason BMWs cost more than Scions, if you want to own a nice home you're going to pay for it. So please don't let the perfect (price) be the enemy of the good.

If you have to buy and the numbers are "close enough," then buy. Do it. But understand it comes at the cost of being a bit underwater for the next few years--maybe five or more if things really hit the skids. If not getting a "great deal" doesn't bother you (and judging by the sales activity of late, it doesn't seem to be troubling too many) then go for it.

BUT, also don't get in way over your head if the fundamentals aren't right. Sometimes "expensive" things are completely worth it (a Shelby Cobra Mustang costs about twice what a stock GT does, but I'll gladly pay the premium to hear that supercharger whine every day). I realize that people, after being priced out during the last eight years or so, are champing at the bit to buy and "get it over with," but just understand that we're not at a true bottom in coastal Southern California. Prices are still way out of line with incomes.

My guess is that we're in a dead cat bounce right now fueled by government spending and attempts to kick the can down the road (Hell, Fannie Mae today just approved a plan to avoid realizing losses on their disastrous portfolio by allowing deadbeat homeowners to rent their house from FNM at no more than 31% of gross income. Hey shitbrick, don't you think implementing that rule on the mortgages you insure would have avoided this clusterfuck in the first place? Anyhow, there's a bunch of homes that should be REO inventory that won't see the light of day for at least another 12 months. Kick the can, kick the can). But after this temporary re-inflation, we'll continue our gradual decline and scrape along the bottom for a few years. In other words, the idea that we're going to have another monstrous housing bubble and you'll "miss your opportunity" if you don't buy now is a total crock.

I simply don't see dangerously loose lending practices or massive statewide wage increases on the horizon to support increasing prices (but I do see significantly rising taxes, which will put a dent in housing budgets. How did you think we were going to pay for the California budget deficits, housing tax credits, and financial bailouts?).

To answer your core question, Mike, here is how I determine whether a primary residence is a good deal:

1) It's as nice or nicer than your rental, and the cost is roughly the same (if your monthly PITI is less than your rental rate, that is a SMOKING deal). If you get in trouble and have to move, and renting it out will cover your monthly payment, you got a good deal.
2) You're proud to show it off, yet the purchase price is only 3.5 times your annual income (4x income, although riskier, seems to be what most Californians are comfortable with, but we're talking about what makes a "good deal")
3) You are spending no more than 31% - 33% of your gross monthly income on housing--including principal, interest, HOA, taxes and maintenance (that's not my number--that's the "safe" number determined by mortgage lenders before they took crazy pills. For fuck's sake, EVEN FANNIE MAE IS NOW ADMITTING THAT 31% IS THE MAXIMUM AMOUNT THAT PEOPLE CAN PAY FOR HOUSING AND REASONABLY EXPECT TO MAKE THE PAYMENTS!).
4) You can afford it without stretching too far, while simultaneously being able to afford to live a good life.
5) You're buying it to live in and not as an "investment." If it's an investment, it will never seem like a good deal because the constant flow of money you'll be putting into maintenance and taxes will be little red daggers on an Excel sheet and not the trade off for homeowner pride. If it's a home, that stuff won't matter.

But really, #1 is the most reliable. And that's because rents are tied DIRECTLY to income. Since there is no way to finance your rent, your monthly payment comes only out of the money you take home each month. Simple, right?

I don't know if I answered your question, but those are my coffee-addled thoughts.

The Terrible Twos

Today's featured seller is yet another 2007 buyer who, after finding herself underwater just two years after purchasing, is scrambling to abandon ship before her terribly timed investment blows up in her face like an IED.

Will she find the comfort of a buyer's life raft in time, or is she just rearranging the deck chairs on the Titanic?

370 WISCONSIN Ave #304, 90814
Price: $348,000
Beds: 2
Baths: 1
Sq. Ft.: 957
$/Sq. Ft.: $364
Year Built: 1967
MLS#: P709366
On Redfin: 2 days
HOA: $187
Down Payment: $69,600 ($12,180 FHA)
Income Requirement: $99,000
Monthly Nut: $2,000 ($2,400 FHA)
Description: Remodeled 2-BD Belmont Heights condo. Secluded Top, Back, Corner unit is in the Best Location in the building! Enjoy great views from the living room picture window. Spacious, open floor plan includes oversize bedrooms with large closets (with closet organizers), Bamboo flooring and dual pane vinyl windows (with nice blinds). Beautiful Kitchen has Silestone counters and ceramic tile floors. Large bathroom features both a shower and a soaking tub. Contemporary colors throughout. 2 deeded parking spaces with 4 large storage lockers! Attractive building has a sparkling lap pool, a nice BBQ area, a community garden and is pet friendly. Walking distance to trendy Portfolio coffee house and retro row on 4th St. Close to Belmont Shore & Pine Ave.

Egregious Title Case abuse aside, that is a fairly good listing description.

I think it's funny to refer to anything in a 957 square foot apartment "oversize," but considering there's only ONE bathroom, perhaps there is a bit more available square footage to play with.

Yuck, nice Pepto-Dismal countertops.

The nabe is pretty good and the (awful looking) building is well insulated from busy 4th Street.

And browsing through the photos, I'm pretty impressed with this interior. Nothing spectacular, but very clean and simple.


Furthermore, the $187 HOA fee actually gets you a pool! When was the last time you saw that?

The problem, as per usual, is price.

First, this matchbox is one of the most expensive in the area (although to be fair, it's nicer inside than the competition).

Second, the comps are playing for the Bad News Bears:

$350,000 2500 E 4th St Apt 308 Sold on Jul 24, 2009
0.05 miles 2 bd / 2 ba 1,093 Sq. Ft.

$308,741 2767 E 3rd St Apt 26 Sold on Sep 02, 2009
0.21 miles 2 bd / 2 ba 805 Sq. Ft.

$375,000 232 Junipero Ave Apt C1 Sold on Jul 07, 2009
0.31 miles 2 bd / 2 ba 1,175 Sq. Ft.

$214,000 2075 E Appleton St Unit 9 Sold on May 29, 2009
0.33 miles 2 bd / 1 ba 913 Sq. Ft.

$191,250 2033 E 3rd St Unit 3A Sold on Aug 19, 2009
0.33 miles 2 bd / 2 ba 953 Sq. Ft.

$360,000 2055 E Broadway Unit 207 Sold on Jun 19, 2009
0.38 miles 2 bd / 2 ba 1,197 Sq. Ft.

$320,000 2101 E 2nd St Unit 201 Sold on Jul 07, 2009
0.38 miles 2 bd / 2 ba 1,118 Sq. Ft.

Notably, the only three units that sold for more than $348,000 during the last six months sported an extra 200 square feet and a second bathroom. This place, as nice as it is, can't possibly compete with that in this price range.

And those sales were in June and July! Now that we are entering the winter months and holidays, the market will slow down a bit, making selling a much different ball game. This seller, if she's serious about minimizing the damage caused by these terrible two years of mistimed ownership, needs to get it in gear and hit the nitrous on price reductions.

First, the asking price is out of line with local incomes. Even if we're generous and calculate 4x income instead of my usual 3.5x, the household income requirement is still $87,000. That's $36,000 more per annum than the median income!

And because of the solo lavatory and the cramped quarters, this is not really designed for a couple, meaning the solitary occupant would have to make nearly $90,000 a year to afford this place--and even then he'd be stretching to do it.

Second, asking $364 per square foot is a pipe dream that Mario and Luigi would be proud of. We're talking pipe dream BY ANY MEASURE:

MEDIAN CONDO VALUES (List $, $/Sq. Ft.)
Alamitos Beach: $241,000, $300
East Side: $207,500, $256
90814: $247,500, $307
Long Beach: $243,000, $263
LA County: $365,000, $317

Sorry, lady. I hate to break it to you but your place isn't special and can't possibly justify the premium.

But one look at the pricing history and it becomes clear why she's reluctant to accept pricing reality:

Nov 02, 2009 - Listed $348,000
May 10, 2007 - Sold $375,000
May 22, 1987 - Sold $90,000

As it stands, if she found someone willing to make the same mistake she did and severely overpay for this tiny unit (sounds like a line from the next Deuce Bigalow movie), her loss after commissions would be -$47,000.

OUCH.

Hopefully after two years of payments she has at least that much in equity, and (assuming she finds a buyer at this ridiculous price) will break even .

But if she got an interest-only loan (which were still available in '07), she needs to be prepared to write a big fat check when she finally finds a seller (at a significantly reduced price).

I think it's going to be interesting to see what happens as 2007 buyers, many of whom listened to the "experts" about the worst of it being over and the housing crash being contained only to subprime riff-raff, unexpectedly creep underwater. It will be interesting because they won't go underwater by nearly as much as their 2004, 2005, and 2006 counterparts, but I posit many will be underwater "enough" to bail.

I'm curious to see how many '07 "owners" hang on through the downturn and years of flat appreciation, and how many pull a monkey-see, monkey-do and moonwalk away from their obligations.

Landlocked in "The Other" Long Beach: UPDATE

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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


And certainly not recently sold comps:

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

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

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

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

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

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

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

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

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

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

Uf da! Get me a Swine Flu mask!

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

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