Thursday, August 23, 2007

Price disparities and foiled flips

Today I caught this listing on Los Angeles Craigslist:

$965000 Just Reduced! 2021 Perry Ave. Unit A, Brand New Townhome

Date: 2007-08-22, 12:11PM PDT Brand new townhome nearly ready for you to move in. Very low price for new construction townhome in Redondo Beach of this size and quality. Newly completed construction, just finished within the past couple weeks. 4 Bedrooms 2.5 Bathrooms 2320 Sqft. Offered at $965,000

I will not post the realtor's information in case he made a genuine mistake. But what strikes me as terribly suspicious is that according to my notes, this property was listed previously on Craigslist on July 13 for $929,000. Then it was listed in Zip Realty in August for $979,000. So the reduction is relative to the Zip Realty price, but not to the prior listing on Craigslist. It was actually raised.

I am almost certain the realtor will email me back and tell me I must have confused Unit A with Unit B, which is listed for $929,000. But I don't think so.

How convenient that old Craigslist listings expire, and they aren't retrievable by archive for over six months.

And what's with this other Craigslist piece?

Great price/location for lovely 3 bds, 2.5 bath RB townhome!!! New 
carpet/refrig/stove, lg closets, pool, suana, jacuzzi, 2 car parking in subterranean 
garage plus private storage conveniently located near unit at front door. Downstairs 
has laminate cherry wood/carpet floors, private 1/2 remodeled bath, living room 
w/warm flagstone fireplace, formal dining area, kitchen w/pantry & laundry room. 
Upstairs has spacious master bedroom w/private en-suite bath and w-2-w closet, 2 more 
bedrooms and another bath w/granite countertop. Super location near 405/105 fwys, 
shopping, gyms, restaurants, beach, 2 blks to Manhattan Beach! Vacant, Move-in 
condition & Priced to sell. Pets ok. HOA pays water,trash,ins,landscaping.

By the way, I've been to open houses for condos in this building, and they make me feel claustrophobic.

This particular condo unit has been through some financial distress and now it looks like another failed flip is taking form. (At least I *THINK* it was through financial distress - check out that price difference between June and Sept 2005.) Here is the recent price history:

June 21, 2005:   $495,000
Sept 15, 2005:   $570,000
July 15, 2006:   $587,000

The realtor listed it in Craigslist around June 1 for $609,000. I got the impression from the original Craigslist posting that it was a remodel. The property finally made it to the MLS and after a few price reductions now sits at an asking price of $579,000.

They are still out there, trying to extract gold from the goose.


Blogger bearmaster said...

The realtor did email me back and said he had made a mistake, with the $929,000 price being an initial estimate he got from the builder before construction was complete.

10:16 AM, August 23, 2007  
Blogger bearmaster said...

BTW, my latest guesstimates for August beach cities sales are:

El Segundo 8
Hermosa 22
Manhattan 41
Redondo 92

New inventory rate for Redondo has slowed down a bit, and I guesstimate 89 new listings for August.

7:12 PM, August 23, 2007  
Blogger Anthony said...

Dear Bearmaster,

I love your work. I tend to follow macro economic trends, and you give me the detail on our local South Bay situation I would not find myself. One of my bear-ish opinions at the marco level, are demographic curves. The baby-boomers begin to hitting retirement in full force starting in 2008. My father is the oldest of these BB's and has been very successful, but even he is in full "no more spending" mode. Harry Dent's book on the effect of generation curves on the economy illistrates this well. 75 million boomers have been stimulating the US economy, and there is not enough money to backfill the spend once they stop. This is just one addition to the "perfect storm" that seems to be approaching us all.

Tony Zuanich
Redondo Beach

9:34 AM, August 26, 2007  

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