I haven’t posted a Real Homes of Genius for sometime because the credit markets were busy being hit with the reality stick and exploding like a birthday piñata. Apparently, Wall Street got a few pictures of what was really stewing in their mortgaged backed portfolios and had a hard time justifying that a 600 square foot home was really worth $500,000 in the murder capital of the
The first home is a spacious 1,045 square foot home in Arleta. With 3 bedrooms and 2 baths, you’ll be wondering what to do with all the extra space. Maybe you’ll rent out the extra room to cover the mortgage. As you can see from the above picture, the gates are slightly ajar welcoming you into your future Taj Mahal. This home is an architectural work of art because the garage is actually three-dimensional like a Rubik's Cube. The assessor has this place listed as 2 bedrooms but what the hell, the garage is converted therefore it is 3 bedrooms. It is a fixer upper according to the ad. So how much is this home listed for? A bargain at $449,000. Even with all the fantastic housing news hitting the media, we still believe that
Didn’t you hear the news? Reinforced steel gates are replacing the mental image of the wooden white picket fences as the ideal for a suburban home. The bank, for some reason feels that this home is still worth a peak price. What is the median income of a family in this area? How about $52,673. And you wonder why so many mortgages are going bad? Unlike Milli Vanilli, this housing decline is real. Even families making $130,000 are having a hard time staying out of foreclosure so you can imagine how this one became another unfortunate statistic. These families are heading straight into bankruptcy court. How any lender got this past underwriting will be a question we will be hearing about many times over for the next few years.
The next home is a pink beauty in
So already, the home is $48,093 under the previous sale price in May. You’ve saved $24,000 each month simply because you are patient and a smart buyer. To put it in a different perspective, any buyer waiting two additional months has saved the median annual income of families in this area.
Do we really need hardcore derivate and credit analysis to give you a visual as to why the mortgage markets are imploding? Do you need a picture of what subprime looks like? This isn’t over pricing a home by 10 or even 20 percent. We are talking about homes that are overpriced by 50 percent. I can understand the difficulty for folks in the housing syndicate to come to terms with what is going on. But this is the reality of the current situation. Wall Street is now forced to go into the trenches of their toxic portfolios and unless they want to become property managers, they’ll need to unload these homes at whatever the market will bear. Moreover, lenders from what I’ve heard are so stringent and playing hard ball these days, that they are actually looking at income statements and asking for 5 to even 10 percent down. The humanity.
Today we salute you Arleta and Compton with our Real Homes of Genius Award.
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