The REOs are hitting the market and we have a wonderful example in Compton California, the place of great schools and family security. When you think of a home with a white picket fence and Lassie running around doesn’t it conjure up images of Compton? Well today we have a flip or sub-prime that went bad and now the bank has to unload it. But lucky for the bank they have a magnificent mansion, at 594 square feet with 2 bedrooms and 1 bath, you'll have plenty of room to entertain so I'm sure bidders are fighting left and right for this place. As you can see from the picture through the steel fence, there appears to be a garage but the only thing I imagine fitting in there is a Toyota Echo or a Kawasaki motorcycle. Don’t you feel like we are taking a stroll down Rodeo Drive?
The home was originally listed at $330,000 but recently was lowered to $321,000. Maybe this is a fair price considering the previous sales data. Well let us take a look:
Sale History & Tax Info Sale History
In this game of life, we have one winner (the owner in 2004), and two losers the seller in 2006 and the bank who apparently thinks they can get peak 2006 prices. We in bubblelandia know that this ain’t going to happen. No Greenpoint, DiTech, or New Century to fund your housing lunacy. Amazing how the bank using their infinite wisdom looked at previous sales data and figured it would get the peak price simply because someone purchased this home in the past for the same amount. Nope. This place if you go on Craigslist would rent for $975 to $1050 a month. And considering appreciation is going down for the immediate future why in the world would you buy this place at that price? Even the $197,000 seems overpriced for this area and this home. From an investors standpoint this makes no sense at all. But what is the typical family income in the area?
Median Mortgage Debt: $35,094
Per Capita: $11,534
At $45,000 median household income people are netting $2,400 to $2,600 a month. Let us run the numbers for a mortgage with 20% down on this place:
Principle and Interest on a 30 year fixed at 6.25% = $1,581.16
Taxes = $333 per month
Downpayment = $64,200
Total Monthly Payment = $1,914
So this family would be spending 73 to 80 percent of their income on housing; and this is considering that they have $64,200 to put down. Oh yes, we housing bears were off base for calling Southern California a housing bubble.
Today we salute you Compton with our Real Homs of Genius Award.