Wednesday, February 25, 2009

Wanna Bet?--UPDATE II

Remember this thing originally posted last February? Well, the saga continues.

This roach motel has been on the market for roughly 550 days. I repeat, 550 DAYS! Good lord.

It's worth noting this short sale slumdog shit shack was originally listed in August of 2007 for $315,000. Hilarious. Your weed dealer deserves a Medal of Valor.

After that ridiculous wishing price, the seller began slowly cutting the price and spent the better part of a year-and-a-half chasing the market down. ALL THE WAY DOWN.

The current asking price of $149,000 represents a more than 50% price reduction. If by some mountaintop miracle this POS sold today, the loss to the lender would be well in excess of $100,000. If lenders are writing off 100k on 600-square-foot dumps like this, it's no wonder most of the financial system is insolvent! I mean, did they even look at the thing before lending out hundreds of thousands of subprime dollars?

And remember the undercutting neighbor who was asking $129,000 in August '08? Now he's aksing $89,000. Ouch!

It's obvious that this place is going back to the bank. Frankly, I'm shocked that it hasn't already. I'm guessing the only reason it's still a short sale is because the foreclosure/eviction process has become so labrinth-like that the bank is forced to allow deadbeats to live rent-free until they can complete the FC process (my bankruptcy attorney friend told me she has seen families staying in houses a year or longer after they stopped making payments. Filing BK and asking the foreclosing lender to provide the original paperwork can further forestall the process).

By the time the bank ultimately takes it back, they're going to be in even deeper trouble. That's because even if the price was cut in half, I'm still not sure it would sell (the neighbor can't get any love at 89k, after all). Honestly, could this sell at any price to an investor? Who would want to be a landlord in this 'hood?

One year ago I (correctly) predicted:

The willful ignorance of Long Beach sellers will get them through a few more months of insane pricing strategies but as inventory stacks up, sales decline, the Spring Bounce never materializes, the "Stimulus Plan" fails to make a dent, and the only people selling are those who chop prices significantly to meet the dismal economic realities, LB sellers will eventually give in to the same grim reality that their Phoenix brethren have painfully accepted.

I am going to make a prediction: This rat hole will not sell at $300,000, $250,000, or $200,000. In my estimation, this little gem won't so much as get a backup offer for anything more than $150,000. You may think that's a dramatic position, but I'll put my money where my mouth is: I'll put $1,000 on it. Any takers?

Obviously nobody took me up on the bet because the truth was plain to see. Even those whose livelihoods depend on proving me wrong knew I was correct.

But the interesting thing is that I was TOO OPTIMISTIC with my sub-$150,000 prediction. Things have changed dramatically during the past year and Long Beach has crashed much harder in certain areas than expected. It's pretty clear at this point that this place won't sell for anything above $140 per square foot. But is that prediction too optimistic as well?

Only time will provide the answer.


  1. El Bee,

    First off, welcome back. Second, that house on Mezzanine is still accpeting backup offers, and thirdly... well, there really isn't a thirdly.

    I do like the realtor's effort on the shithole on Brenner. The description says "GREAT LAYOUT BIG LIVING ROOM...DON'T LET THE SQFT FOOL YOU."

    The shack is 560 SQ.FT. Define Big Living room please? I want to deduct that from 560 to guess how "nice" the bedrooms are.

    My crappy 1050 sq.ft. apt in Huntington has a "big" living room. I think 11x16.

    Still waiting for the wave to 90808/90815.


  2. Carl,

    HA! I think some refrigerator boxes provide more interior space.

  3. This is truly an awesome series of posts, and another great case study of the sheer lunacy of the bubble.

    I love the overhead view shown on the property listing. Whereas most places at least get a reasonably sized rectangle this joint receives a tiny little square. It's like you're living on a Kraft Single.

    And you only have to go to the bird's eye view to see what a shit area this shit place is in. I think the birds would actually steer well clear.