The Pinhead Premium

Asking Price: $499,000
640 ORIZABA Ave, Long Beach, CA 90814
Beds: 3
Baths: 1.75
Sq. Ft.: 1,564
$/Sq. Ft.: $319
Lot Size: 4,350 Sq. Ft.
Year Built: 1912
MLS#: 12136163
On Redfin: 19 days
Income Requirement: $114,000 (mortgage/3.5)
Down Payment: $100,000
Monthly Nut: $2,700
Description: STANDARD SALE. ABSOLUTE MOVE-IN CONDITION 3 BED. /2 BATH. THE PROPERTY FEATURES FIREPLACE IN LARGE LIVING ROOM, NEWER MAPLE KITCHEN AND GRANITE COUNTER TOPS, NEWER WINDOWS, NEW INTERIOR PAINT, TRAVERTINE FLOOR IN FOYER, AND HARDWOOD FLOOR THROUGHOUT LIVING, DINING AND BEDROOMS. INSIDE LAUNDRY AREA AND FAU/CENTRAL AIR.

PLEASE STOP YELLING AT ME!

This place was purchased in 2003 for $437,500, and the loanowner made it EXACTLY five years (hmmm...five-year Option ARM, anyone?) before trouble started. Knowing he couldn't afford the full payment anymore (or ever), he desperately tried to get out from under his obligation in February 2008.

After two years and 11 days of extend and pretend can-kicking and gaming the system (aka living rent-free while the bank dragged its heels), the bank finally took it back for $424,000 -- essentially the '04 price.

Just three weeks after taking it back, the lender slapped it on the MLS (it's funny how banks don't seem to be in any sort of hurry as long as a property stays off the books, but as soon as they take it back they suddenly snap into action)...with a $95,000 premium attached.

WTF?

They've since lowered the price to $499,000, which isn't crazy compared to some of the garbage that's selling these days, but that's still a chunk of change.

With all of the recent happy talk about "V-shaped recoveries" and good times being here again, it's easy to forget we're still muddling through the disastrous results of the Great Housing Bubble. You know, the bubble? Remember?

Here's a refresher course:

May 29, 2003 - Sold (Public Records) $437,500 (22.3%/yr)
Mar 09, 2001 - Sold (Public Records) $280,000 (262.4%/yr!)
Sep 13, 2000 - Sold (Public Records) $150,000

Ponzi-tastic!

Anyhow, this house is pretty sweet. It's on a reasonably sized lot in an okay neighborhood (a little too close to 7th for my taste), has a back yard, and looks crisp and clean on the inside.




I'm just trying to figure out why the bank thinks it will get such a hefty premium over what they paid (and nobody else was willing to pay) at auction.

Oh, who the hell knows. It'll probably be in escrow by the time I publish this.