Friday, January 30, 2009
Tuesday, January 20, 2009
John makes it out alive, but as Hans calculatingly predicted, McClane's feet became so plugged with jagged shards of glass that he was unable to walk on his profusely bleeding feet. He drags himself into a Nakatomi Towers bathroom and, much to the audience's gut-wrenching horror, begins slowly pulling out huge chunks of glass as he winces from the incredible pain. Brutal.
I bring this up because pulling postage stamp-sized shards of glass out of your flesh reminds me of what it must be like trying to sell this house:
Jul 07, 2008 - Listed $3,875,000
Aug 27, 2008 - Price Changed $3,699,999
Sep 05, 2008 - Price Changed $3,499,999
Dec 10, 2008 - Price Changed $3,199,999
Dec 29, 2008 - Price Changed $3,100,000
Jan 06, 2009 - Price Changed $2,999,000
Jan 17, 2009 - Price Changed $999,000
Says Eddie of Long Beach (by the way, RE in the LBC readers are on fire lately with the good tips!):
Have you seen this?
My wife and I walk our dog by this place and we've watched it go from a construction site, to an open house with 2 signs out front, then an open house with 12! signs out front, to this, a major haircut.
Of course, its not likely to be approved as a short sale but talk about a desperate seller.
I too, used to drive, walk, and ride by this house frequently last summer and once the construction was finally finished, I was always tempted to pop into the open house to ascertain why nobody was interested. When I looked it up online, it didn't take me long to figure it out: A certifiably-WTF price of $3,700,000.
Well, after slowly, excruciatingly pulling out a shard of glass every few months, the pain became overwhelming and just this month the seller decided on amputation rather than the gradual bloodletting of the last five months.
Here's a quick look at the numbers:
Address: 2401 E Ocean Blvd, 90803
Asking Price: $999,000
Size: 6 beds, 6 baths, 5,000 sq. ft. (built in 2008)
$/Sq. Ft.: $200
On Redfin: 197 days
Down Payment: $199,800
Monthly Payment: $5,400
Income Requirement: $285,000
Description: SUBJECT TO BANK APPROVAL - ALL BIDS DUE BY 2-22-09 - All Bidders will receive 'best and final counter'. Custom built home w/Guest House just finished in 2008, W/Certificate of Occupancy; Spectacular Ocean Views located in Belmont Shore across from the Long Beach Museum of Art. butlers pantry, formal dining room & formal living room w/Ocean Views, master suite w/private terrace & Ocean Views. Guest House too! Wrapping up the circular Turret is a dramatic long spiral staircase leading to the second level. Finest Marble & Brazilian Cherry Wood floors, spectacular foyer, Marble fireplace in the living room, Marble through out the Great Room, Spanish Terracotta back patio & front entrance, all open up to large oversized French doors, ELEVATOR & 4 CAR GARAGE. If this home is in your price range, you do not want to miss it! PS: VIKING STAINLESS APPLIANCES not in sale, buy frm SELLER. + extra Dishwasher Drawer, SUB ZERO Refrigerator.
What a disaster. This flipper probably thought he was pretty clever buying this ocean-front property at the peak and constructing a luxury villa. Blinded by dollar signs.
He tore down the existing house, used primo materials, included luxury touches like Viking appliances, a home theater, and a FREAKING ELEVATOR...and then got stuck on the wrong side of the worst housing implosion in the history of the world.
And as he runs for the door of this shattered glass house, the shards are pushed deeper and deeper into his sole.
And hence the Hail Mary asking price of $999,000. Now, whether that price is a ruse to create a bidding war (which is likely, and even more likely to work), it still reeks of panic and fear.
By the way, that "Ocean View" is partially obstructed by the Long Beach Museum of Art across the street. If you see the property in person you'll truly appreciate the masterful crop job on this photo:
Well, I wish them luck with the short sale. For no other reason than I will no longer have to look at those hideous realtor signs and Open House banners when I drive by.
And if the bank doesn't approve this price, just tell 'em: [NSFW video]
Monday, January 19, 2009
Well, I guess a Belmont Shore house walking distance from 2nd Street would be a good start.
Which reminds me, the perpetually awesome KatyinLBC updated us on the never ending saga of the Problematic Puke Palace on Park:
Just in case you are looking for a place to rent, you are in luck, they put this one on craigslist:
And it's still on redfin. lol
Not only are they so delusional that they're still asking $2.25 Million after 523 days on market, but now they believe they can get $6750 per month in rent.
In this economy.
For this eyesore.
The problem with sellers offering to lease their home while simultaneously trying to sell it is that they show all their cards. They just revealed to any potential buyer with access to a Texas Instruments calculator that purchasing this house, as opposed to renting it for the (supposed) going rate of $6,750, would cost you an extra $3,000 per month. Um, thanks for confirming how woefully overpriced your house is?
I mean, who in their right mind would sign up for that happy horseshit?
And when you factor in the further asset deflation guaranteed to transpire during 2009, the monthly bloodletting is almost too enormous to comprehend.
Where is a super rich, incredibly homesick Japanese vending machine tycoon when you need one?
Wednesday, January 14, 2009
Friends, I present Jaydiohead (Check it out before he gets served with a cease and desist).
Anyhow, back to real estate.
Address: 1310 E OCEAN Blvd #105
Asking Price: $250,000
Year Built: 1984
Size: 1 bed, 1 bath, 1,000 sq. ft.
$/Sq. Ft.: $250
On Redfin: 16 days
Down Payment: $50,000
Monthly Payment: $2,000
Income Requirement: $71,000
Description: FINALLY! A DEAL ON OCEAN BLVD. DIRECT ACCESS TO THE BEACH, CENTRALLY LOCATED NEAR BELMONT SHORE, THE PIKE, PINE ST, EAST VILLAGE, BELMONT SHORE, NAPLES AREA AND A BIKE RIDE AWAY TO SHORELINE VILLAGE AND THE AQUARIUM. OR TAKE A SHORT WALK TO COFFEE SHOPS, RESTAURANTS AND SHOPS. UNIT INCLUDES: LAUNDY FACILITY, CABLE AND INTERNET READY , TILE COUNTERTOPS WITH TILE FLOORING WITH NICE OPEN FLOORPLAN WONDERFUL AMMENITIES: STATE OF THE ART GYM, SUANA, HOT TUB, POOL, CABANA, 24 HR SECURITY GUARD, AND ACCESS TO THE BEACH AND JOGGING TRAIL ,ETC. 1000 SQ FT 2 SUBTERRANEAN PARKING SPACES
"LAUNDY?" "AMMENITIES?" AND TURN YOUR STUPID CAPS LOCK OFF!
The short sale price on this (enormous) ground-level apartment represents a 50% loss in two-and-a-half years. Yikes! What do you call something shorter than a short sale? A squat sale?
And to understand why condos are taking such a severe beating (and will continue to do so), all you need to do is peek at the greed-faced insanity that transpired during The Great Housing Bubble:
Aug 08, 1988 - Sold $210,000
Nov 22, 1999 - Sold $198,000 (11 years of ownership, and all I got was this lousy loss)
Mar 25, 2005 - Sold $432,000 (1999 owner walks with $200,000 after holding for 5.5 years)
Jul 03, 2006 - Sold $510,000 (2005 owner squeaks out a cool 50 grand for 15 months of ownership)
That's right my friends, this joint sold near the peak for $510 per square foot. Sweet Rosie O'Donnell that's insane! And insanely unsustainable.
So, after a 50% discount from the 2006 price (and a 28% reduction from the original asking price), we're hovering above the sales price from THE FREAKING EIGHTIES! But it's still not an attractive buy.
Those three familiar, eternally dreadful letters strike again:
In this case, we're talking $725 smackers per month.
Did your intestines just roll up into an arbor knot? Ouchies.
So your monthly payment FOR A ONE BEDROOM APARTMENT goes from a more-than-manageable $1,300 to a whopping $2,000 instantly. Considering you can rent a two-bedroom with ocean views (this discounted domicile is pool view) for the same price, buying doesn't make much sense.
Who knows, maybe this apartment is really kick ass inside. Of course, we'd never know because the listing agent didn't bother to include any useful photos. Ah, the joys of squat sales.
Oh well, to paraphrase HOvA (get it?), "I got 99 problems but catastrophic depreciation on an overpriced asset ain't one."
Sunday, January 11, 2009
Well, I actually think the Kool-Aid drinkers are right about that one. Except the foreigners aren't coming here to buy properties. No, apparently they're here to sell them:
Great Opportunity to live in one of Long Beach's most fine apartment buildings. The 'International Tower' with a view of the Queen Mary, Marina, and the Ocean. This is a true meteropolitian experience.
"meteropolitian"? Two typos in one word?!
Boy, with a listing description like that, I'm shocked some Sony executive hasn't flown in on his G4 to swoop this place up.
Good lord, after 264 days you'd think the six-percenter would spruce the listing up a bit, no? And, oh, I dunno, ADD A FREAKING PHOTO OR TWO. Dude, I shouldn't have to tell you this, but foreigners live in foreign lands--the Internet is a handy tool for them to scope out properties before flying over here to buy them.
Forgetting for a moment that this is a global recession and the dollar, although beaten and bruised, is still doing considerably better than many currencies, why on earth would a rich foreign buyer want to pay half a million clams for a one bedroom?
Further, why wouldn't they just buy the larger two bedroom, also with ocean views (that particular ESL agent refers to it as an "uobstructed" view), for less money?
This building is an unmitigated disaster, folks. At least 18 units for sale and hardly anything moving. The average Days on Market for the building is 108! Overpriced much?
And keep in mind, that 108 average includes five units going on sale during the last 11 days, and doesn't include the units that have been re-listed. For example, #607, our featured property, has technically been on the market since February of 2007! Damn dude! Almost two years?
No amount of Swiss telecom moguls or Taiwanese household electronics magnates are going to save this building. Especially given the increasingly tightening lending standards, it will be a hard sell finding buyers at these prices.
Which means asking prices will inevitably come back down to earth from the 32nd floor. And by "come back down," I mean JUMP OFF THE BALCONY RAIL IN A FIT OF SUICIDAL DESPERATION AND HIT THE ASPHALT FACE-FIRST.
Saturday, January 10, 2009
Address: 2662 E 2nd St. #F2, 90803
Asking Price: $309,000
Size: 2 beds, 2 baths, 1,275 sq. ft. (built in 1966)
$/Sq. Ft.: $242
HOA Fee: $224
On Redfin: 4 days
Down Payment: $61,800
Monthly Payment: $1,900
Income Requirement: $88,000
Description: Don't miss this beautiful opportunity in the Tiarra Imperial complex in the heart of Bluff Park historical district. Features include: very open and light floorplan, hardwood floors, completely remodeled kitchen with travertine counters, peach travertine flooring, and high end stainless appliances. This unit also boasts a master suite with private bath, INSIDE LAUNDRY, spacious, south facing balcony with city views! Designer appointments throughout! Hurry, this property will not last!
In this neighborhood this close to the ocean, $242 per square foot is a smoking deal. For once a listing agent is correct exclaiming "this property will not last!"
But before Anonymous gets his panties in a bunch, it is worth noting this is a short sale. That means there is little likelihood this price will be approved by the bank. Further, short sale status means it will likely take two months for the bank to reject that price. No need to get too excited.
See how comfortable this cat looks?
She knows as well as anyone that it will be a looooooooooong time before she needs to relocate her litter box.
So, yes, until it actually sells for $309,000 (which would make nearby sellers' heads explode), there isn't much reason to believe true affordability for hard-working families is here. However, my overall point is that this is a sign of good things to come. Remember, it wasn't too long ago that sub-$300 per square foot was considered by perma-bulls to be anomalous outliers. Now $250 per square in Long Beach is as common as crabs in a truck stop brothel.
But the most interesting thing to ponder about this property is HOW it became a short sale.
Consider this: according to Redfin the current seller purchased in 2000 for $177,500 ($139 per square foot!). If you add up the last eight years of ownership, right now she has at least $100,000 in equity, meaning the total outstanding balance on the loan would be around $77,500.
SO JUST HOW IN THE HELL IS THIS A SHORT SALE AT $309,000?! She should be pocketing more than $200,000 and boarding a plane to Barbados!
The most likely answer is that she compulsively refinanced, tacked on massive HELOC (Home Equity Line of Credit) loans to the balance...and blew the money. How can you conclude otherwise?
And assuming that's the reason for the short sale, it means she must have taken out all of her $100,000 in equity, PLUS hundreds of thousands of dollars on top of that. Incredible to think about, no?
With all the talk of subprime and Option ARM loans sending people into distress and foreclosure, it's easy to forget about the stunning number of pre-bubble homeowners who got drunk on HELOC juice and serial refinancing during the real estate frenzy. Not many people are talking about this phenomenon, but it will certainly be a factor in growing distressed properties, and it turn further price decreases.
As far as the actual property goes, I'm tempted to submit an offer. Seriously. I really like this place.
I drove by today and I could totally see myself living there. Obviously I would need to change some things upon purchase. Namely, the atomic booger paint scheme in the kitchen:
Not to mention filling the nail holes made by all those frames (take it easy, lady. I realize you're a big fan of Aaron Brothers, but relax. Actually, I might have an idea where all that HELOC money went).
Other than the mint-colored kitchen and Yoda's bathroom, I'm pretty impressed. It's spacious, in a killer neighborhood, has in-unit laundry, a comparatively reasonable HOA, and I love the floors and plantation shutters.
The downsides are that it has two shared walls and only one parking spot. But overall this would be a really nice place to live. I guess the question is whether or not the bank has any intention of letting it go for such a seductive price.
Considering a unit one upstairs sold in August for $451,000, I very seriously doubt it. Methinks the $309,000 asking price is nothing more than an attempt to create a bidding war.
But considering what the top-floor unit sold for, and what nearby units are listed for, if you listed at $390,000 you would still be competitive and could eliminate the need for a short sale.
Or would it elminate the need?
I'm open to your ideas, but I suspect the HELOC-abuse is much worse than it appears. Unless there was a sale during the peak for $500,000 that didn't show up on Redfin, that's the only logical explanation.
UPDATE: An astute reader pointed out that Redfin is already reporting the condo is "Off the Market." My suspicion is that the seller was trying to get a loan modification and threatened to short sell it for way below comps as a means of leverage. That's pure speculation, but given the overall fishiness of this listing, it wouldn't surprise me.
Sunday, January 4, 2009
Before I go any further, does anyone out there disagree with that?
Okay, just making sure we're all on the same page (read: planet earth).
So, within the context of that premise, I'd like to highlight a particularly delusional Long Beach seller who believes the Great Housing Crash never happened, and that he is immune from the reality of 2004 pricing.
Address: 2425 E 5th St #1, 90804
Asking Price: $349,126
Size: 2 beds, 1 bath, 840 sq. ft. (built in 1971)
$/Sq. Ft.: $416
HOA Fee: $120
On Redfin: 51 days
Down Payment: $70,000
Monthly Payment: $2,100
Income Requirement: $100,000
Description: NEWLY REMODELED - READY TO MOVE IN NOW 2 BEDROOM CONDO, new kitchen & bathroomwith beautiful tile floors, Kohler Executive Chef sink, Kenmore convection oven and cooktop, new butcher block counter tops, dishwasher & venthood, new cherry hardwood floors throughout, recessed lighting, new interior doors, new double glazed windows, new double patio doors, new crown molding-base boards-door & window casing, doggy door, patio, laundry hookups, floor to ceiling mirrored closet doors, private garage with storage & Kayak racks behind remote controlled gated parking lot, low HOA dues $120, Condo located 5 short blocks to the beach on quiet 1 block long street.
Kayak racks? Huh? Well, I hope you like kayaking because they can't be used for anything else. After all, they're Kayak racks.
Other than the cheap cabinets and awful countertops in the tiny kitchen, this is a very nice remodel. Well done with attention to detail. I mean, check out the cool doggie door:
Only one shared wall, french doors into the patio, indoor laundry hookups, nice hardwoods, incredibly low HOA...this is a nice apartment.
The problem, as is common with Long Beach sellers, is the price. This place is just too small, and the economy too damaged, to command $416 per square foot. For an individual or couple to reasonably afford this place, the household income would have to be $100,000 per year. Not unheard of for a couple in Southern California, but consider that the median income for this zip code is just over half that amount.
That means the median Long Beach family is priced out of this 840 square foot apartment. In fact, the median family would be shelling out 6.5 times their annual income to (literally) squeeze into this place.
I dare anyone to claim this is an above median property in a prime area. Dare you.
I know everyone got used to $300,000-$350,000 as "the norm" for condo prices, but when provided with a little perspective about how unaffordable these prices are, you start to see how far down prices still have to fall.
So, it's abundantly clear that this apartment is overpriced. Forgetting the cramped quarters, the so-so neighborhood (bums sifting through recycling bins are common in this area), the ground-floor level, and the solo garage spot, the most damning information is the fact that it sold for $250,000 in 2004.
Yep. Despite the ironclad fact that most Long Beach properties (especially less desirable properties in less desirable 'hoods) are selling for 2004 prices, this numbnuts thinks his property appreciated 10% per year during the last four years--AND HASN'T LOST A SINGLE DOLLAR OF VALUE DURING THE WORST HOUSING MELTDOWN IN THE HISTORY OF THE WORLD.
Wake up, pal.
Not even the most delusional perma-bull would argue those upgrades are worth $100,000.
There's no way in holy hell this place would fetch $2,100 a month in rent. Maybe in Belmont Shore, but not here. So, clearly this price is all wrong. But what do you expect from someone so ignorant to the realities of the new housing era? This property is doomed to rot on the market, unless a knife-catcher descends from heaven to bleed cash for the next few years and be stuck in cramped quarters while doing it.
But forget all that. Here's my favorite part of the listing:
Will Consider Sale
Oh really? Good thing you're considering selling it, considering you're selling it.
Friday, January 2, 2009
Here is the original post:
Address: 207 E Broadway #301, 90802
Asking Price: $553,000
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $422
HOA Fee: $327
On Redfin: 153 days
Down Payment: $110,600
Monthly Payment: $3,700
Income Requirement: $158,000
Description: SHORT SALE APPROVED AT $553,000!
Well, considering it was priced $4,000 cheaper for 150 days AND STILL FAILED TO GARNER ANY BUYING INTEREST...best of luck with that!
* * * * * * *
As I suspected would happen, that approved short sale price didn't attract a buyer. The new pricing is indicative of serious capitulation, as the short sale asking price has been reduced by a mammoth $103,000 trying to nab a buyer. That's a helluva haircut!
Here is the updated listing information:
Address: 207 E Broadway #301, 90802
Asking Price: $450,000
Size: 1 beds, 2 baths, 1310 sq. ft. (built in 1925)
$/Sq. Ft.: $324
HOA Fee: $327
On Redfin: 197 days
New Down Payment: $85,000
New Monthly Payment: $2,700
New Income Requirement: $121,000
Description: Gorgeous south and west facing corner unit loft in the Historic Insurance Exchange Building! True loft living with open loft layout, exposed ceilings, gorgeous blond wood floors and floor to celing windows with city views! Unique floorplan, over 1300 square foot footprint with 1.5 baths, master bath with dual vanity, jacuzzi tub and two person shower. Enjoy additional square footage and privacy from the custom built-out sleeping loft. Central AC and heat, private storage room, secured parking, gourmet kitchen with granite countertops and viking appliances. One of a kind loft in one of the most well designed and sought-after loft conversions downtown.
Despite that typo, I'm thankful they finally bothered to provide a listing description. And a really good one, too! Bravo, bravo!
This loft is about as cool as they come. I'm legitimately impressed. We aren't treated to photos of the bathrooms (uh-oh) but the upgrading work looks new. Assuming the bathrooms aren't disastrous, all you need is some sleek, modern furniture and you're set.
And check out those phantom stairs!
Someone told me those rail-less stairs aren't compliant with building codes (good luck navigating those things after a night of downtown boozing), but damn they look awesome!
And speaking of downtown boozing, if this economic downturn persists well into 2009, I'm wondering if we're going to see an upsurge in downtown criminal activity. It's possible that Long Beach's commendable efforts to clean up downtown and make it a nightlife hot spot will be gradually erased as the unemployment rate climbs and state budget woes create cuts in services to the poor.
I hope that's not the case, but it's something to consider when checking out downtown properties and thinking of long-term values. And considering many downtown properties are (still) woefully overpriced and have yet to see the full force of equity destruction experienced in other Long Beach areas, crime will have a tangible effect on further price declines.
As far as this property goes, I don't know if the bank actually agreed to this greatly reduced short sale price but I fear that it's still not enough to find a buyer in this economic environment. This place would make a great spot for a young, high-income childless couple, or a young, very wealthy single professional, but outside of those specific criteria I can't see much of a market for this place (I mean, that's more of a "sleeping platform" than a "bedroom"--not very practical).
I guess the question is whether that very small, very rare, very wealthy subset of potential buyers that could comfortably afford this place will believe it's worth $450,000. I somehow doubt it.
Thursday, January 1, 2009
If you recall, in the original post I included some guesses as to where the architectural inspiration stemmed from:
For those keeping score at home, the price reductions have progressed as follows:
Oct 05, 2008 Listed $1,035,000
Nov 19, 2008 Price Changed $739,000
Dec 22, 2008 Price Changed $650,000
A total of $385,000 in price reductions in just TWO MONTHS! Delusion didn't last long with these folks.
And by the way, the new asking price is $190,000 cheaper than the least expensive nearby property. This thing must be a real shit hole.
You'll notice they added "Priced accordingly to reflect condition. Property needs upgrading" to the description, likely an attempt to lower expectations in response to the projectile vomiting they've encountered when showing the property.
Anyone think this will see sub-$200 per square foot before it's all over?