kaulat

Today’s property is a lesson in pure, unadulterated ignorance. Ignorance so powerful that it can shield an owner from uncomfortable truths and painful market realities. During the last few years, real estate was viewed as an investment, in the traditional sense that it was something that paid regular dividends in the form of appreciation. At the height of the madness, it was believed by many that double-digit appreciation would keep going and renters would be "priced out forever." “This is a new paradigm,” they said. People got themselves into tricky, dangerous loans to buy properties way beyond their means, spent money on frivolous consumer goods, and racked up enormous debt, all under the auspices that values would continue to increase and they could “just refinance later" or "pull more equity out" to pay for the house, nice cars, and vacations. This worked out just fine for many homedebtors, especially those who bought early enough to capitalize on years of

IrvineRenter over at The Irvine Housing Blog has a concise, well-worded post about Speculation vs. Investment . I strongly recommend taking a few mintues out of your day to read it.

You may remember my suspicion a certain listing agent was playing MLS peek-a-boo with his unoccupied condos in this post . Well, my suspicion has now turned to grim, mildly-nauseating confirmation. As you will recall, a week ago the properties listed were: Units #5, #10, #17, and #18. While browsing through Redfin today, I noticed #5 has been pulled and Units #9 and #24 have been put in its place (at 3 and 4 days on the market, respectively). Transparent, crass, desperate...just a few words that can be used to describe this sort of manipulation. I guess it's possible that the owners of #9 and #24 recently sold and the properties have suddenly, unexpectedly re-entered the marketplace. It's also possible that Elvis is a line cook at The Yard House, but would you wager money on it? Plus, it's the same listing agent and the same description. You, sir, are busted. I'm calling this sort of tomfoolery out for what it is: a clear attempt to mislead potential buyers about

By the way, quick shout out to Redfin . Not only is this invaluable research tool shedding light on the housing insanity we’ ve just experienced in California and nationwide, but, like rings on a tree stump, it can tell you a lot about individual properties and their owners. This Redfin listing tells us that temerity, grit and possibly brain damage are the three essential elements required to continue on the disastrous path this poor seller has chosen. Address: 2236 San Vicente Ave, 90815 Must Be a Really Good Weed Dealer Next Door Price: $645,000 Size: 4 beds, 2 baths, 1506 sq. ft. (built in 1953) $/Sq. Ft.: $428 Purchase price: $585,000 Purchase date: 10/2005 MLS #: P527330 On Redfin : 548 days (!) Description: Beautifully Remodeled Los Altos Home, Upgraded Dual Pane Windows & Elec . Service, Polished Hardwd Floors, New Custom Paint in/out, New Fixtures, Upgraded Base Molding, New Kitchen-Maple Cabinets-Stone Counters-Appliances-Recessed Lighting-Tile Flooring, Newly Remodeled

Today’s featured properties illustrate a growing phenomenon in the real estate world: Comp Killers. When one property on the same street or in the same condo complex sells for a price significantly higher or lower than nearby properties, it sets a new “comp,” or comparable value for the area. A comp is one of the tools realtors, appraisers, lenders, and (hopefully) buyers use to determine the value of a specific property. Comps are great when prices are going up because if you bought for $500,000 and a neighbor sells a similar house for $550,000 the next week, the new value for neighborhood properties is $50,000 more than what you paid. Sweet, right? Instant equity! However, in a declining market (which even the most delusional real estate bulls agree we are in currently) comps can be extremely dangerous. For example, if you buy a place for $500,000 and a house on your block, similar in size and amenities, sells for $400,000—that’s the new comp for your property. And if your asking pri

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/22/BUTEUJN7I.DTL&tsp=1 "Foreclosure activity is closely tied to a decline in home values," DataQuick President Marshall Prentice said in a statement. "With today's depreciation, an increasing number of homeowners find themselves owing more on a property than its market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move." Once these foreclosed properties hit the lenders' books, the clock starts on getting them off those books. The bank couldn't care less about destroying neighborhood comps--they only care about minimizing losses. So what's going to happen to property values once this enormous influx of bargain properties comes onto market and adds to an already overwhelming supply of homes? 0 0 0 0 0 0 0 0 0 0 *splat!* And what's going to happen to already struggling owners who suddenly find themselves underwater, and can't

The only reasonable reaction to today’s first property is: WTF ? This seller is asking $4.5 million in Alamitos Beach. Now, the property is brand spanking new from the ground up and is right on the sand, which is rare and quite impressive. There is absolutely no doubt the location of this house justifies a hefty price premium. But $1,406 per square foot?! This property was purchased exactly three years ago for $930,000. My first thought was, Wow, to demand that kind of appreciation the builder must be installing 24 karat gold toilets, diamond roof shingles, and throwing in 10 years of butler service. However, according to the description that’s not the case. This seller, with no pictures of the interior, believes the eight pictures of sand is enough to reel you in. That must be some awfully special sand. Address: 1724 Bluff Pl, 90802 Smoking The Good Stuff Price: $4,500,000 Size: 4 beds, 4 baths, 3200 sq. ft. (built in 2007) $/Sq. Ft.: $1,406 Purchase price: $930,000 Purchase date: 1

According to DataQuick , Long Beach had the third highest number of sales for November 2007 in all of Los Angeles County. That’s very impressive, and could demonstrate Long Beach really is immune from the surrounding housing meltdown, as some on this blog have intimated. And the fact that the median home price only dropped 1 percent (to $505,000) between 2006 and 2007, is strong evidence supporting that. However, although the run-up of property values (fueled by a now non-existent easy-money lending binge) was not as severe in LB as surrounding counties, the current state and national economic factors will virtually guarantee further downward pressure on Long Beach housing prices. Here is why I believe that: A DISCUSSION OF BASIC ECONOMICS Do you know why landlords in Alamitos Heights don’t charge $4,000 a month for a 1 bed/1 bath? Because the local income in Alamitos Heights wouldn ’t be able to support that rent. And unless wages went up dramatically, or all area landlords suddenly

Today's property is a great example of a poorly timed condo conversion. When the market was red hot and appreciation was in the double digits, credit was easy to come by even if a buyer had spotty credit and/or little or nothing to put down. Because Long Beach doesn ’t have the raw land to construct a lot of new buildings, there were a lot of apartment-to-condo conversion projects to meet the newfound demand. It got to the point where there was so much competition, nearly every place I looked at had granite counter tops , crown molding, and vinyl windows—it was practically the standard. But, as those of us who read the newspaper now know, those halcyon days of appreciation and insane up-bidding are dead as a doornail. So, I’m featuring this property to highlight how rampant speculation can definitely pay, but only when you watch the signs on the horizon and time it correctly. Otherwise you get caught holding the bag, and with unoccupied units that’s a scary position to be in. Addr

From newquest : Are you really a Long Beach native? I ask this because your claim that it is not such a good time to purchase there shows to anyone with a brain that you really have no idea what your [sic] are talking about. Your ignorance of the market place combined with your arrogance vis -à- vis the “commission earners” tell me that you probably are not a sales person and just another employee of some firm that has to pay you to blog because their business model is failing massively in this market while the seasoned and traditional brokers are actually prospering and growing! Having a 9 to 5 job is probably a good thing for someone like you but remember that everything that you are writing is putting you deeper and deeper in a hole. Your [sic] building a case against yourself with every post you write. My Response: Again with the gross assumptions and personal attacks. The last bastion of someone on the wrong side of a debate. For the record, I write these posts on my own time. I’

Today’s featured property is a real find. Are you sick of married life? Stressed out with raising kids? Dying a slow, boring death at your dead end job? If so, you have an opportunity to re-live your college glory days “Old School” style. That’s right, your very own fraternity house! In fact, the seller is so confident you want to hearken back to your Frank The Tank days, he didn’t even bother to stage the place! Well, except for the rear parking lot. Look at what kids are driving these days: Cadillac CTS with rims, BMWs…instead of selling the place, they should have jacked up the rent! Address: 745 Elm, 90813 Asking Price: $569,000 $Size: 5 beds, 2 baths, 2,082 sq. ft. (built in 1907) $/Sq. Ft.: $273 $Purchase price: $117,000 $Purchase date: 1990 MLS#: P597408 On Redfin: 138 days Description: * * * FIXER * * * or, * * * BUILDABLE LOT * * * Excellent opportunity. Presently used as a fraternity house! Just a block south of St. Mary's Hospital on a huge lot (50 X 150). Zoned PD-29 (w

Why buy in Orange County when you can pay Irvine prices right here in Long Beach? Now, I realize within the context of the massive housing bubble we just experienced, $545,000 doesn't make many people flinch. But, I want you to really think about that sum. Almost $600,000. More than HALF A MILLION DOLLARS. Now, I want you close your eyes. Think about the house you would want to live in for that insane amount of money. Probably fairly big, lots of room to have your parents and friends over. Nice appliances, great neighborhood, decent schools. You've worked extremely hard and sacrificed a lot to save up the $54,900 down payment, and possibly put yourself through grad school to land a job paying the required $136,000 annual salary. Now open your eyes. Is this what you imagined? Address: 1533 E. Broadway, 90802 Wishing Price: $545,000 Size: 2 beds, 2 baths, 1200 sq. ft. (built in 1918 ) $/Sq. Ft.: $454 (!) Purchase price: N/A Purchase date: N/A MLS #: R704655 On Redfin : 260 days D