Wednesday, April 29, 2009
The little weasels have cut the price twice since we last checked in, totalling $75,000 in reductions. However, $399,000 (reduced from an original $499,000) still represents a logic-flattening $639 per square foot!
Here is the updated info:
Address: 535 Grand Ave, 90814
Asking Price: $474,000
Year Built: 1920
Size: 1 beds, 1 baths, 624 sq. ft.
$/Sq. Ft.: $639
Purchase price: N/A
Purchase date: N/A
On Redfin: 183 days
Down Payment: $80,000 (from $95,000)
Monthly Payment: $2,100 (from $2,600)
Income Requirement: $114,000 (from $135,000)
Description: Charming 1 bedroom, 1 bath California Bungalow in fantastic Belmont Heights corner location. Great opportunity to own a single family residence in prestigous Belmont Heights for around the price of a condo. Close to the ocean, shopping, restaraunts and transportation.
How is being located on the corner of a busy four-way stop intersection "fantastic?"
And the only way $399,000 is "around the price of a condo" is if said condo had twice the bedrooms, bathrooms, square footage, and was close to the beach.
I have to give the little piggies credit for reducing the price on a fairly steady schedule, but they are still so far off it's amazing that they can even manage to pump their own gas (at this price, I think they're trying to ensure only their butler will be filling up the Escalade from now on).
According to my calculations, the monthly payment on $399,000 would be almost TWICE what you could rent this so-called "single family residence" for. Ridiculous.
Here is the price reduction history, along with my prediction for the future of this property should the sellers fail to get serious soon:
Oct 28, 2008 - Listed $499,000
Jan 06, 2009 - Price Changed $474,000
Mar 09, 2009 - Price Changed $449,000
Apr 21, 2009 - Price Changed $399,000
May 25, 2009 - Price Changed $369,000
Jun 26, 2009 - Price Changed $349,000
Jul 24, 2009 - Price Changed $339,000
Aug 20, 2009 - Price Changed $319,000
Sep 22, 2009 - Price Changed $299,000
Oct 15, 2009 - Price Changed $289,000
Nov 20, 2009 - Price Changed $279,000
Dec 12, 2009 - Price Changed $269,000
Jan 15, 2010 - Price Changed $255,000
Feb 16, 2010 - Price Changed $245,000
Mar 8, 2010 - Price Changed $229,000
Apr 27, 2010 - Price Changed $219,000
May 25, 2010 - Price Changed $215,000
Jun 26, 2010 - Price Changed $205,000
Jul 16, 2010 - Price Changed $199,000
Aug 17, 2010 - Price Changed $189,000
Sep 24, 2010 - Sold $185,000
This place may be a detached bungalow, but it's not in a prime area of "prestigous" Belmont Heights and the corner location and shabby interior make it very undesirable.
This 90-year-old wobbler would only be of interest to an investor seeking cashflow or a retiree who doesn't want to live in Leisure World (considering it's a probate sale, it makes sense that's what happened here). But by asking such a ludicrous price, these probate pissants have effectively priced those buyers out of the market.
Good thinking, sport.
Who knows? Maybe they'll find a knife catcher during the Super Summer Selling Season(tm). Assuming of course said knife catcher isn't afraid of a further 50% drop in value.
However, after 183 days with no interest (or spell checks), finding that buyer seems increasingly unlikely.
Tuesday, April 28, 2009
Dear El Bee,
According to a recent Market Watch [sic] article, the shift in the housing market that we'e [sic] all been expecting has finally happened: home prices are on the rise for the first time in a year.
That means that if you're thinking about buying a home (and I know you are!), it may be better to act sooner, rather than later. There are a lot of fantastic homes in your price range that I'd love to show you - just let me know of a good day and time, and I'll happily set up viewing appointments.
Read the full Market Watch [sic] article here:
Talk to you soon,
[SoCal ZipRealty Agent]
Translation: BUY NOW OR BE PRICED OUT FOREVER!!!
Not only did ZipRealty recently call the bottom, but now they've got the brass balls to actually call the recovery!
The funniest part is, the person who sent this e-mail CLEARLY did not read the very article she was so quick to cite as evidence of the end of the housing downturn.
WASHINGTON (MarketWatch) -- U.S. home prices rose 1.7% in January compared with December, the Federal Housing Finance Agency reported Tuesday. It was the first monthly increase in a year.(emphasis added)
The "unexpected rise" in January was partially due to stronger sales in some markets [i.e. NOT CALIFORNIA], FHFA said. The FHFA index attempts to control for such changes in sales patterns, but the adjustment is not perfect, the agency said. The agency warned that its estimate was uncertain and subject to large revisions.
December's index, originally reported as a 0.1% increase, was revised down to a 0.2% decline.
"While this is certainly good news, in our view it is too soon to call a turnaround in the cycle," wrote Charmaine Buskas, a senior economist for TD Securities. "We will have to see several consecutive months of improved prices before a true turnaround can be called, and a significant inventory overhang remains."
Prices rose or were flat in eight of nine regions in January; only the Pacific states [LIKE CALI-FUCKING-FORNIA, YOU DOLT!] registered a decline, down 0.9%.
In the past year, prices are down in all nine regions, led by the Pacific with a 21.1% decline.
The Case-Shiller index, a separate price index that has less geographic reach but better coverage of the bubble mortgages, shows a much larger price decline of 18.6% in 2008 and a drop of 27% from the peak.
So, basically, the article completely, and totally discredits ZipRealty's bogus claim that "home prices are on the rise" and therefore it's "better to act sooner, rather than later."
In fact, the very authors of the FHFA report essentially guarantee there will be a large revision downward! Furthermore, the article emphasizes this fractional movement upward in national prices--not California, mind you--should be considered an anomaly until this otherwise useless data is supported by several months of consistency.
I mean, just how stupid do these commission-heads think people are? Judging by this attempt to shine a festering turd of bad news into evidence of a housing recovery, quite stupid indeed.
Do not let them get away with their fear mongering horseshit. And do not be suckered by transparent attempts to call the bottom or insist prices are headed in any direction but straight down.
Sunday, April 26, 2009
Address: 4649 E 4th St. #16, 90814
Asking Price: $449,000
Year Built: 1985
Size: 2 beds, 2 baths, 1,401 sq. ft.
$/Sq. Ft.: $320
HOA Fee: $390 (!)
Purchase price: $560,000
Purchase date: 10/2005
On Redfin: 10 days
Down Payment: $90,000
Monthly Payment: $2,700
Income Requirement: $128,000
Description: This 2 bedroom & 2 bath gorgeous condo is a must see. Turn key pride of ownership. Foyer entry, to gorgeous distressed wood floors throughout. The entire home has been remodeled with exquisite taste. Chandeliers throughout the home. Mahogany fireplace. New Kenmore appliances. In wall safe. Tumble marble flooring in bedroom and bathroom.
Yeah, but does it have a chandelier above the toilet like this guy? I didn’t think so.
Er, well, actually, close enough:
And what's up with the sink in this (cluttered, messy) bathroom? Is that another toilet?
It looks like the Stay Puft Marshmallow Man's hemorrhoid pillow:
The most significant aspect of this apartment is the 2002 sales price. $291,000 ($208 per square) seems like a pretty good deal considering the bubble had already been picking up steam by '02. But what the holy hell was our current seller thinking when he determined paying $560,000 just three years later made good financial sense?
20% annual appreciation seemed “normal” to you? Really? Hell, Bernie Madoff couldn't even hit those numbers.
And speaking of bloodsucking leeches, check out these creepy drawer pulls:
Is it just me, or do these bathroom cabinets look like the cheap-o 1985 originals with a half-assed paint job?
Anyhow, I still find it amusing when people compare current asking prices to peak-o-the-bubble prices and conclude it must be a "good deal” because it’s “X% off.”
What they don’t consider is what the property sold for pre-bubble. When we finally hit the bottom, most properties will have fallen (at least) to their pre-bubble prices and considering how much “equity” has been wiped off the face of the planet in such a short amount of time due to this unprecedented, now undeniable housing bubble, people need to use pre-bubble prices as the pricing starting point. Moving backwards from an artificial, reality-defying, Ponzi-scheme-derived sales price to determine "value" is as useless as a kickstand on a tricycle.
This condo is a perfect example. The current asking price of $449,000 is “20% off” the 2005 price of $560,000.
“Wow! What a steal!”
BUT, today’s price is an astounding 54% ABOVE the 2002 price (which isn’t even a “pre-bubble” price--it's two full years into the bubble). Considering most Long Beach condos are selling for 2003 prices and headed lower, is this still a “smokin’ deal?”
It’s all about perspective.
As you can clearly see, this individual picked a REALLY bad time to buy, and an even worse time to sell. If this seller can find a sucker to pay the current asking price of $449,000, the loss to the loanowner will be $137,000--not including the costs of upgrades.
If we’re nice and estimate the seller spent $40,000 on “distressed” (just like the seller!) wood floors and other upgrades (which will be fortunate to fetch $0.50 on the dollar in this highly-competitive, post-“Flip This House” environment), the seller will face a catastrophic loss of nearly $160,000.
Wow, that’s about $40,000 in depreciation for every year of ownership!
But it gets worse. That's because this place has ZERO chance of selling for $449,000. Sure, this large apartment is nicely appointed (bathroom cabinets notwithstanding) and has every amenity you could ever need (pool, inside laundry, two secure parking spots. etc.) but the days of half-a-million-dollar non-beachfront condos are dead like personal responsibility.
Some might point out that the price per square foot isn’t that crazy compared to the neighbors, but the point is the neighbors aren’t selling either!
I think this seller could find a knife catcher if they slashed $65,000 from the demand tonight. They don’t know it yet, but if they accepted $385,000 right now it would be the best thing that ever happened to them. My prediction is they’ll reject such “lowball” “scavenger” offers throughout the year only to discover in winter that the market has completely passed them by. Only then will they realize that $385,000 would have been a phenomenal deal.
But they can't go down to $385,000. Because although they might have enough equity to absorb a $160,000 loss (keep in mind this is not a short sale!), a $225,000 loss is a completely different animal. Which means this will eventually become a short sale.
And given the ever-growing volume of distressed properties lenders must contend with, the bank probably won’t be able to act quickly enough to prevent this from going into foreclosure.
Hell, some of the photos make me think the seller already has one foot out the door:
Gold records stacked neatly along the wall...
Crap in boxes (lit beautifully by that chandelier, by the way) ready to go...
It appears as if they're already waving the white flag. And with a ~$3,400 monthly payment, it's not difficult to see why.
The good news is, once wannabes like this are purged from the market and Long Beach real estate values return to some semblance of reality, you and I will be able to snag swanky little apartments like this for reasonable, affordable prices.
Be patient. We'll get there.
Thursday, April 23, 2009
After two consecutive months of price gains, Orange County's housing market may have bottomed out.
But with home-default figures hitting a record high in March, it's clear that a new wave of distressed sales are headed to market. [And? And?! Spell it out for us, OCR. Draw the obvious conclusion: With the amount of distressed inventory about to hit the market, this is most assuredly not the bottom. I mean, how can your lede be "we may have bottomed out," followed by a line immediately refuting your claim? Oy.]
But DataQuick analyst John Karevoll observed that it's not likely that the median will go below January's low-water mark.
"In the world of likelihoods, I think we have seen the price bottom," Karevoll said. "But that's a statistical change only."
Lots of hedges, including "may have" "not likely" and "in the world of likelihoods" but that is bottom-calling, no doubt about it.
Could they be right though? Are the bears blinded by their burning desire to see prices fall further?
Hey, in a time of rapidly dwindling newspaper ad revenue, who is one of the primary sources of advertising income to the Orange County Register? Oh, the Real Estate industry?
MY GOD! LOOK AT THE SIZE OF THAT GRAIN OF SALT!
Wednesday, April 22, 2009
"I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained," he added.
In 2007 we also had commission-driven real estate "professionals" buying into that Pollyanna bullshit and slinging nasty comments on this blog, venomously ridiculing my attempts to educate people about the truth and warn them about the housing crash already underway.
Sadly, based on advice from real estate "experts," many people in 2007 bought overpriced properties because, according to those with a vested financial interest to say so, "Now is a great time to buy" just as values were starting to fall. And the results for many 2007 buyers will be disastrous.
And even those who manage to scrimp and save and rent out rooms to just barely hang on to their houses will have to live with the heinous fact that they could re-purchase the very same home for half of what they paid years earlier.
Now, to be fair to the people who timed the bubble so poorly, you can't call the peak of a bubble until quite a while after it happens. BUT, it didn't take a real estate "pro" to figure out that $429,000 ($411 per square foot) for a two bedroom apartment on a busy street a mile from the ocean made absolutely no financial sense.
Fast forward to Spring 2009, and it's so abundantly clear how wrong everybody was--except those who were paying attention. But don't ask me. Ask this poor guy with quite possibly the worst timing imaginable:
Address: 384 Redondo Ave #401, 90804
Asking Price: $429,900
Year Built: 1987
Size: 2 beds, 2 baths, 1,044 sq. ft.
$/Sq. Ft.: $412
HOA Fee: $260
Purchase price: $429,000
Purchase date: 1/2007
On Redfin: 186 days
Down Payment: $86,000
Monthly Payment: $2,400
Income Requirement: $123,000
Description: One of a kind designer penthouse just a short walk to the ocean.No common walls.Soaring 17ft high vaulted ceilings.Newer complex was built as a condominium not a converted apartment building.Incredible views toward the ocean, sun sets & city lights views.Remodled kitchen & bathrooms.New egenered wood floors. Washer & dryer in unit.Warm & cozy fireplace.Large walk-in closets and lots of storage.Two parking spaces with storage.
So, how long have you lived in this country? English lessons going well?
Pardon my language, but this person is FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUCKED.
There's no two ways about it. Here's why:
He can't afford the monthly payments. This is obvious. Why else would they be selling for a loss during an era of unprecedented housing deflation?
He can't rent it out. This place would be lucky to rent for $1,650 per month. This one, also a penthouse, closer to the beach, is asking (asking, mind you) $1,750. The nearly $800 monthly bloodletting would kill them, amounting to a minimum loss of nearly $10,000 per year.
He can't lower the price. He bought at the peak (actually, the market was already on the way down by early 2007) and tried to sell it a year and nine months later for $10,000 more than he paid. After five months with no luck, in March of this year the price was reduced to $429,000 ($900 less than the January 2007 sales price). Worst of all, even if he could find a knife catcher to bail him out at this ridiculous asking price, it would result in a loss of $26,000 just in commissions. So, basically this is already a short sale, and any further price reductions would be catastrophic to his financial future.
So, here are the options:
1. Rent it out and let the difference between carrying costs and rent slowly destroy your financial lives.
2. Or, mail back the keys tonight.
It sucks, but that's the choice you have to make, pal.
Yes, I guess you could technically try to short sell it. But, let's be frank; the minimum loss to the bank will be $110,000, and that's assuming it acted immediately to slash the price 25% to bring it closer in line with reality. It's very unlikely that's going to happen.
The 2000 sales price was $186,500 and I have no doubt it will approach--and possibly reach--that value again once this bubble is done with its slow, excruciating implosion.
I almost feel sorry for this guy because it's obvious he took a lot of pride in this place. Sure, he Tuscan-/Tao-ized the thing within an inch of its life, but it doesn't appear he was some flipper looking to make a quick buck. Instead, it just looks like a professional dude who succumbed to the "real estate is always goes up" pressure and got way in over his head.
It's a shame. But it's life. Hell, with inside laundry and no common walls, I would definitely be interested in this place. But, unlike this guy, I'd only buy it at a price that I could comfortably afford. And it will get to that price.
Finally, via CalculatedRisk, we read that California Mortgage Defaults Jump to Record High, highlighted by this little nugget:
A particularly toxic period appears to have been August through November 2006 which had more than a 9 percent default rate. Of the 2.1 million loans made in 2007, it's 4.6 percent - a percentage that's likely to rise significantly during the rest of this year.
And today's property will add to that number.
The Bottom for Housing is Probably Not Near
As is often the case at these auctions, the seller of the condo — Fannie Mae — retained the right to refuse the winning bid and keep the property. But Mr. Houtkin told me he was optimistic his bid would be accepted. An R.E.D.C. employee suggested to him that $30,000 wasn’t much below the minimum price that Fannie Mae had hoped to receive.
How could that be? Because Fannie Mae, like many banks, is inundated with foreclosed properties. In recent weeks, banks have begun accelerating foreclosures again, after having held off while waiting to find out which homeowners would be eligible for the Obama administration’s assistance program.
The glut of foreclosed homes creates a self-reinforcing cycle. Falling prices lead to more foreclosures. Foreclosures lead to an excess supply of homes for sale. The excess supply then leads to further price declines. Jan Hatzius, the chief economist at Goldman Sachs, says that the “massive amount of excess supply” means that home prices nationwide will probably fall an additional 15 percent.
Tuesday, April 21, 2009
Community laundry? Check.
Ridiculous HOA considering the lack of amenities? Check.
Delusional greedtard with a What The Fuck asking price? Check!
WELCOME TO LONG BEACH, Y'ALL!
Address: 3665 E 1st St #302, 90803
Asking Price: $499,900
Year Built: 1972
Size: 2 beds, 2 baths, 1,034 sq. ft.
$/Sq. Ft.: $483
HOA Fee: $278
Purchase price: $330,000
Purchase date: 2/2004
On Redfin: 21 days
Down Payment: $100,000
Monthly Payment: $2,800
Income Requirement: $143,000
Description: This upscale corner unit is located on a lovely tree-lined street a block-and-a-half from the beach in charming Belmont Heights. It's a short stroll to Belmont Pier, Olympic Pool, and the trendy shops of Second Street. It has large bright windows and a nice balcony for enjoying the ocean breezes. Priced to sell, with over $60,000 worth of upgrades including maple kitchen cabinets with storage pullouts, granite countertops in the kitchen and baths, a custom stainless steel backsplash in the kitchen, s/s range with convection oven and warming drawer, s/s refrigerator and s/s dishwasher and built-in microwave, custom marble shower in the master bath, plantation shutters, solid core doors, stylish ceiling fans in kitchen and master bath, porcelain-glazed tile floors in kitchen and master bath, Brazilian Cherry hardwood floors, frameless glass shower doors, new and renovated vanities, brushed nickel hardware on doors and in baths, scraped ceilings throughout, and generous closet space.
"Priced to sell?" Half a million dollars for a 1,000 square foot apartment with community laundry and one parking spot?
You're not priced to sell...you're priced to dwell (on the MLS for an eternity).
And it's a good thing it's "a short stroll" to the Olympic pool, because your nearly-$300 a month in HOA fees sure as hell doesn't pay for an association pool.
And I've got really bad news about your "$60,000 worth of upgrades."
First, you got ripped off. How do you dump 60,000 clams into a tiny apartment and not come out on the other end with some friggin' crown molding?
Second, 60k just became 20k. Sorry about that. But nobody gives a flying flamingo fart about your "Brazilian Cherry" floors or "brushed nickel hardware." And even those that do sure as hell aren't going to pay, dollar-for-dollar, what you did for all that crap.
I mean, have you read a newspaper lately?
Obviously not, because your astronomical asking price works out to your 2004 purchase price of $330,000, plus $60,000 for upgrades, and then $109,900 for, uh, well...I don't know what that could be for. Because your 5th grade teacher gave you a gold star and told you you were special?
So, just to be clear, despite the news and neighborhood conversations being overwhelmingly focused on the worst housing implosion in our nation's history, you somehow concluded your property was the only one in Long Beach to actually appreciate during that time? By $170,000, no less?
Ma'am, are you sure your 5th grade teacher didn't hold you back a grade or four?
Oh, fine, I'll give you some compliments to make you feel better:
The neighborhood is a great selling point.
Those plantation shutters are a nice touch.
One of your showers looks pretty good.
That stainless steel backsplash looks, um, interesting?
(I'm struggling here)
Umm...I haven't been to Bono's in a while and your listing photo reminded me to go back?
Look, lady, there's no way in holy hell this thing rents for $2,800. Not with one garage spot (street parking in this area is brutal), and not with nearby upgraded 2 bed/2 baths renting for $1,650 - $1,800.
Hell, even some of the most expensive luxury rentals in Long Beach with TWO garage spots, a gym, and a pool (these units are way out of your league and in no way comparable, but I want to make a point here) are asking less than $2,200!
Something is clearly wrong here, and that something is you and your insane ideas about your property's "worth."
Lower the price or get the hell off the MLS.
Monday, April 20, 2009
In this post from October, I predicted the $190,000 asking price would require significant cutting to interest an investor.
Specifically, I posited that even $166,000 still wouldn't be enough to lure a buyer.
At the time my reasoning was:
If you take the December 2001 sales price of $126,500 and calculate a 4% annual appreciation rate, today this condo would be valued at $166,000.
However, at $166,000--a discount of $24,000--the monthly payment would still exceed equivalent rent by about 100 bones (By the way, I could have started the appreciation timeline at the 2000 price of $87,000, but I didn't want to make the seller cry).
Well, after eight months on the market and a little List/De-list/Re-list grab assin', here we are at $158,000 and still no dice for this short sale.
For the record, if you take the pre-bubble price of $87k and compound 4% appreciation, today's value would be $124,000. Yep, that's a 2001 price.
And the price that would make this place a good buy. With 20% down and tax benefits, even considering recent reductions in asking rents, an $800 monthly PITI (Principal, Interest, Taxes, Insurance) would still reach rental parity--and maybe even beat it. But $124k is a long way from where we are today.
Personally, I think this place will sell long before it gets down to $124k because it's already so close to rental parity. But given the extremely narrow owner-occupier market for such a place (young, single folks) and the unemployment situation (creating an iffy investor market), you never know.
Sunday, April 19, 2009
Personally, I was made to feel like a fool for not buying an overpriced house in 2005 and had to endure condescending conversations with people who barely made it out of high school but were now rolling in fake "equity" and looking down on me for being a lowly renter. And when I started this blog I was castigated further for pointing out the truth and documenting the all-too-obvious housing bubble implosion. So I have to admit that many aspects of the housing crash bring a smile to my face.
Some say it's wrong to take pleasure in others' misery. In certain circumstances that's true, but that won't dissuade me from feeling all warm and fuzzy inside when some idiot flipper, who helped bid up housing prices beyond the reach of hardworking families, mistimes the market and loses his ass. That makes me smile.
Or when an arrogant seller, willfully ignorant of reality, slaps an insane WTF price on his house and refuses to even make counter offers on what they consider "lowball," "offensive" offers. Then, once they realize they're in a position where they can no longer afford their monstrous mortgage and lower the price, it's too little, too late. And they end up chopping tens of thousands (or hundreds of thousands, depending) off the price...all to no avail. The market has long passed them by and they are punished for their greed with the haunting realization that they just cost themselves an extra $100,000 by refusing to deal when they had the chance. That tickles me pink.
Obviously the schadenfreude is tempered by the fact that you and I ultimately will pick up the tab for this mess (enjoy my money, CitiBank!), but still.
And there are limits to how far the schadenfreude should extend. People are always quick to drag out the (incredibly rare) exception of the person who was diagnosed with cancer and had to use their mortgage money for chemo treatments. OBVIOUSLY nobody should take great pleasure in that person losing their (our) house.
And I have some friends in shaky situations, and I don't want to see anything bad happen to them. However, I also don't want anyone--even my own friends and family--to get the impression they can live well beyond their means without very steep consequences.
And guess what? Other than a ding on a credit score, the worst thing that happens to people that lose a house is they rent. Nobody is being put on a rack and having their arms torn out of their sockets--you just rent. You still have shelter. There is no shame in that and, as is so clear now, renting was the right move all along during this unprecedented run up in housing prices.
My point is, if you're a person angry at those that appear to take pleasure in others' failures, just take a look at this listing and tell me you don't want these sellers to fail, and fail MISERABLY.
Address: 207 Nieto Ave, 90803
Asking Price: $1,295,000
Year Built: 1924
Size: 3 beds, 2 baths, 1,533 sq. ft.
$/Sq. Ft.: $845
Purchase price: N/A
Purchase date: N/A
On Redfin: 22 days
Down Payment: $259,000
Monthly Payment: $8,000 (@6.75% jumbo)
Income Requirement: $370,000
Description: California classic expanded to include a 2 br./1 bath residence with large master suite and an additional 1 br./1 bath deluxe apartment above a large 2 car 1 bath garage, housed in a separate building. Resort Living at its finest! Enter seclusion through solid Brazilian mahogany gates as the protection of hand-laid brick privacy fencing surrounds you; yet, the heart of the shore's action is only steps away! A passage of spectacular stoneware planters and exotic fishtail palms leads to a courtyard w/2 deep-seating patio conversation areas, an outdoor kitchen, fountain, and bbq. Premium Super-Krete garden-stone graces the deck. From copper/galvanized plumbing, bronze emergency shut off, secured storage area, tank-less hot water, and bronze solar window screens, to the large Mediterranean dining-set w/ umbrella for outdoor entertaining, the exquisite charm & meticulous attention to detail of this Hacienda Oasis is amazing! Design elegance that translates into near Zero-Need-Upkeep.
$845 per square foot? FUCK YOU. DIE IN A FIRE.
See, doesn't that feel good?
And what exactly is wrong with the realtor that they include only five photos of the house, and THREE random "Scenes of Long Beach." Tell me exactly what this has to do with your listing:
How about a picture of, oh, I dunno, THE FREAKING KITCHEN?! Is it too much to ask you to include a snap of one of the bathrooms? This is what you think sells houses?
WTF? If those idiotic waste-of-bandwidth photos are what sells houses, then here are a few more you should definitely add to the listing:
What a dolt.
And it's worth mentioning that out of the five actual house-related photos, only one, count 'em, ONE, is an interior shot:
And the others are as useless a snooze button on a smoke alarm:
Judging by the realtor's marketing "skills" I'm going to take a stab in the dark here and guess that their business isn't doing too well these days. Just a hunch.
And then there's the price. Let's consider what this seller sees all around him to better gauge how they arrived at their insane asking price. After all, maybe Belmont Shore is holding up better than we think. Let's see:
On a price per square foot basis, this is by far the most expensive listing in ALL of Belmont Shore. The average in BS is $478/Sq. Ft.
Of the handful of BS homes lucky enough to have sold in the last four months, the most expensive went for exactly half of this asking price.
Even the most optimistic rainbow-bolts-shooting-from-your-rectum estimate from the always laughable Zillow.com is $787,860.
So how on earth do you explain the decision to ask $1,295,000?!
Pure and simple.
And sometimes the only way to respond to this level of greed is to wish misery, failure, and abject financial ruination upon them to teach them a lesson about letting the worst in human nature take over.
Friday, April 17, 2009
April 16, 2009 - The status was "Active" and changed to "Contingent"
Something is rotten in the state of Denmark.
Let me get this straight. At the peak this apartment sold for an incredibly inflated $485,000. And three years into the worst housing crash in the history books, with Los Angeles prices crashing 40% already (25.8% of that just in the last year), this SHORT SALE (which are always priced lower than regular sales) went contingent yesterday for only 17% off the peak price?
With this kitchen?
In a building with a top floor unit going contingent for $40,000 less?!
Yeah, I smell horseshit. I don't think this one is going to make it out of escrow.
Unless this seller found the absolute dumbest knife catcher in all of greater LA.
I mean, just look at the numbers:
Address: 2538 E 2nd St #107, 90803
Asking Price: $400,000
Year Built: 1976
Size: 2 beds, 2 baths, 1,347 sq. ft.
$/Sq. Ft.: $297
HOA Fee: $250
Purchase price: $485,000
Purchase date: 9/2006
On Redfin: 164 days
Down Payment: $80,000
Monthly Payment: $2,300
Income Requirement: $115,000
Description: Spacious remodeled two bedroom, two bathroom condo with gorgeous new bamboo hardwood flooring, new carpet & new tile, romantic fireplace, scraped ceilings, dining area, AND INSIDE SIDE-BY-SIDE LAUNDRY. Additional features include 2 separate huge walk-in closets in the very large and spacious master suite . Nice large kitchen with oak cabinets and convenient pull out drawers and breakfast nook with access to the outdoor patio. The large and spacious living room features a gas fireplace, outdoor courtyard patio and wet bar. This secure updated building features only 24 units and low association dues, and the unit comes with two tandem parking spaces, and two storage spaces in a subterranean parking garage. Gorgeous...Must See!!!This unit is so spacious and has such a great look and feel.
And then look at the photos:
Nice shitter chandelier. Classy.
How on God's green earth could this be considered "remodeled"? Original kitchen, original appliances, original bathrooms, no crown molding...where's the remodel? Oh, two coats of Benjamin Moore counts as a remodel now?
Look, I get that Long Beach apartments this large are hard to come by so there is going to be a premium. In this neighborhood especially. But this is ridiculous.
A $2,300 a month monthly nut--not to mention the costs of actually remodeling this place--is awfully steep. And nowhere near local rents.
If this unit is actually in escrow and this isn't the realtor's bullshit attempt to keep the listing popping up on MLS alerts, then I must congratulate him on a job well done. If by some miracle this sale goes through, you were able to sell an overpriced condo for a WTF price in an ever-deteriorating market. Well played, sir! But, as Reagan used to say regarding the Russians, "Trust but Verify" (which, ironically, he totally ganked from the Russians--"doveryai, no proveryai").
So, until I can verify a closed sale, I have a strange feeling we'll see this bad boy back in Active status shortly.
Wednesday, April 15, 2009
Okay this is weird...shhhhh...I think they're listening!
That's right. 30k price cut.
Wow, just two days after my update post. By the way, type "3057 Volk Ave Greed" into Google, Yahoo or AIM search and look what site comes up first. Nice.
Can you imagine what the LB real estate world would look like if sellers actually did read the Long Beach Housing Blog and heeded my advice? I guarantee one thing: Houses wouldn't sit on the market for 564 days.
Now, at 564 days, we see that the price has been reduced a whopping 10%. Ten percent!
WTF is wrong with you people?
Here is the updated listing info:
Address: 1833 E APPLETON St #8, 90802
Asking Price: $150,000
Size: 1 beds, 1 baths, 623 sq. ft.
$/Sq. Ft.: $241
HOA Fee: $90
Purchase price: $260,000
Purchase date: 1/2006
On Redfin: 564 days
Down Payment: $30,000
Monthly Payment: $900
Income Requirement: $43,000
Description: SPACIOUS, TURNKEY CONDO, 2ND FLOOR UNIT WITH BALCONY & PLEASENT VIEW OF PARK LIKE COURTYARD. UNIT FEATURED HARDWOOD FLOORS, & CLASSIC CERAMIC TILE, NEWER KITCHEN CABINETS, BUILT IN MICROWAVE, STOVE, DOUBLE PANE WINDOWS THROUGHOUT. EXELLENT LOCATION IN DESIRABLE ALAMITOS BEACH , JUST FEW BLOCKS FROM THE OCEAN, AND WALKING DISTANCE TO THE PARK, SHOPS, AND RESTAURANT. SELLER'S IS HIGHLY MOTIVATED, PRICED TO SELL FAST ! BANK APPROVED !!!! EASY SALE, NO MORE WAITING CLOSE IN 30 DAYS. FOR MORE INFO SEE AGENT COMMENTS.
"UNIT FEATURED HARDWOOD FLOORS"? What happened to them?
But the true highlight of that garbled, terribly punctuated listing description is this:
"SELLER'S (sic) IS HIGHLY MOTIVATED, PRICED TO SELL FAST ! BANK APPROVED !!!! EASY SALE, NO MORE WAITING (sic) CLOSE IN 30 DAYS..."
Yeah. About that. Anyone who spends nearly two years trying to sell something is the exact opposite of "HIGHLY MOTIVATED."
Between the seller, the bank, and the listing agent, this whole thing (still) looks like a gang of monkeys fucking a football.
Last June I said:
Although 1833 Appleton makes sense at the current price I doubt it will actually sell for $165,000. Because the bank will likely drag its feet approving the sale, the property will continue to rot while surrounding prices plummet further. And even though this starts making sense at $165,000, it us STILL overpriced and doesn't align with local incomes.
Well, I have a stunning Long Beach Housing Blog announcement: With a $900 monthly PITI (assuming 20% down and no maintenance costs), this bad boy is at rental parity!
Hm. That's funny. I half expected to be trampled by a horde of investors, stomping and elbowing their way to make an offer on this place.
Now, someone with functioning synapses in their brain might think to themselves, "Hm, perhaps this dump is still a bit overpriced."
But not this tool team. Nope. I can see them now, pulling out the cheap, rickety kitchen chairs and huddling around dead varmints to plan for the next 564 days of "aggressive" price cuts.
Next stop, below rental parity.
Tuesday, April 14, 2009
One of the first properties I ever featured on this blog has finally, mercifully sold! Click here for the (seemingly endless) series of posts: THE BOOGER CHRONICLES
The original asking price was $310,000, and long ago I predicted that would need to be cut nearly in half before the property would reach its true market value.
In March of 200friggin8, I said:
At $160,000 it might make sense as an investment property. It would have to be torn down (or maybe the Historical Society would come down on you for trying to level this 95 year-old dumpster) and rebuilt, so you have to factor in those costs as well.
I'm a few months late, but here you go:
Jan 5, 2009 - Sold $165,000
Come on, admit it.
I'm fucking GOOD.
And all I did to make that amazingly accurate prediction was consider fundamentals: Local rents, local incomes, and pre-bubble appreciation rate (It's no coincidence that a home rotting on the market FOR TWENTY THREE MONTHS only sold once the price met those fundamentals).
And that's what you should be doing with every house you look at.
Monday, April 13, 2009
Well, it’s technically not an update because nothing has changed since last year, but I just wanted to draw to your attention that this rube still refuses to reduce the price--despite almost 400 days on the market.
Great plan there, Sparky!
Check out these shenanigans:
Apr 11, 2009 - Relisted
Mar 26, 2009 - Off Redfin
Dec 04, 2008 - Listed $649,000
Dec 04, 2008 - Off Redfin
Sep 06, 2008 - Listed
Sep 02, 2008 - Off Redfin
May 09, 2008 - Price Changed
Feb 24, 2008 - Listed
The unwavering delusion of Long Beach sellers is astounding.
What do you want to bet that each of those "Off Redfin" entries represents a listing agent getting fired? "Reduce the price?! How dare you! I'm not going to give the thing away! If you're not going to help me find a buyer to overpay for my 'investment' then I'll find someone who will!"
The saddest thing about this listing is that after a full year on the market, we have yet to see a photo of any of the three bathrooms. You know what that means: They are unmitigated disasters. Probably pink tile and everything.
I mean, keep in mind that horrendous, incredibly outdated kitchen gets two listing photos!
How bad must the bathrooms be to consciously (and conspicuously) leave them out?
Obviously this seller is sticking to his idiotic guns and is waiting for as long as it takes to sell for what he believes this house is worth. We'll see you in 2040, pal!
And as he waits for that knife catcher with a heart of gold to arrive on his magical unicorn, the market will get further and further away from him. And then a foreclosure will pop up, and then another, and another.
And then, as the countless Option ARMs in Rancho (how else do think LB buyers could afford to pay $600,000+ for these average homes at the peak?) explode, the cascade of falling prices will become overwhelming. We will no longer be talking about losses in the tens of thousands...18 months from now the losses will be in the hundreds of thousands.
Somebody needs to be a friend and tell him what he so obviously doesn't want to hear: $650,000 will NEVER happen. Get serious now, or regret it forever.
Friday, April 10, 2009
No, not that one. This filthy portrait of greed, delusion, and desperate market chasing:
Feb 24, 2009 Price Changed $274,000
Mar 12, 2009 - Price Changed $239,000
Feb 24, 2009 - Price Changed $274,000
Jan 03, 2009 - Price Changed $279,000
Dec 19, 2008 - Price Changed $299,000
Dec 04, 2008 - Price Changed $329,000
Nov 24, 2008 - Price Changed $350,000
Oct 07, 2008 - Listed $404,000
Jan 23, 2004 - Sold $367,000
Mar 30, 1999 - Sold $135,000
Sep 14, 1998 - Sold $70,000
Oct 03, 1997 - Sold $122,325
Jul 31, 1992 - Sold $120,000
Yikes, what a sordid tale.
As you can clearly see, in early 2004 our seller purchased the duplex for an astounding $367,000. That's $232,000 more than the previous owner paid just five years earlier (23.1% appreciation per year!).
Then, after a few years of crime, deadbeat tenants, constant maintenance calls (a likely result of perpetually-deferred maintenance), and incessant headaches, our seller finally got fed up and in October 2008 listed the property with a hilarious price tag of $404,000.
Mind you, any investor worth his salt would know prices had been on a steady decline since 2007, yet he still decided to add a 10% premium to his (already inflated) purchase price. This move was pure greed. And adorable.
Anyhow, he quickly acknowledged the futility of that asking price, accepted there were no greater fools out there to help him in his quest to break even, and began cutting the price every month thereafter.
And here we are today.
Still waiting for a greater fool.
Just, uh, hangin' out.
Scopin' out the scene.
Ship's comin' in aaaaaany minute now.
Interestingly, the seller seems fully aware that the ONLY people that could possibly be interested in this "fixer uppper" (Now there's an understatement. The only thing that could "fix" this dump is a bonfire and a bulldozer) are investors (I mean, does anyone out there think someone would buy this mold farm and actually live in it?). To wit:
Gross Scheduled Income: $18,600
Monthly Gross Scheduled Income: $1,550
Gross Multiplier: 12.85
Actual Annual Gross Rent: $18,600
Actual Gross Annual Income: $18,600
Net Operating Income: $12,342
Capitalization Rate (%): 5.16
Taxes (New): $5,000
Operating Expense: $6,257
Advertising Expense: $150
Water/Sewer Expense: $800
Trash Expense: $120
Gardener Expense: $500
Insurance Expense: $800
Licenses Expense: $100
FreedomCM seems to have a handle on this kind of thing, maybe he can crunch the numbers and see if the assumptions are correct and this makes sense.
Even if the numbers do pencil out, it begs the question: If makes such a great, cash-flowing, "bread and butter" investment property, why sell it in a rapidly deteriorating market for a loss of $140,000?
Hey, wanna see another dirty picture?
Click on the Redfin link, scroll down to the Overhead View, click Aerial, and take a gander at all that backyard dirt!
Combine a garden hose, a few tiki torches, some loose women, and you've got yourself the best mud-wrestling stadium EVER.
I wonder if they figured admission fees into their Gross Scheduled Income calculation?