Saturday, September 8, 2007

I just love your carpets




There were so many ugly photos of this Culver City wreck that I didn't quite know where to start. How about starting with the living room. What are those stains just above the window? Could it be mold?

Horrific is the only word that adequately describes the carpet. There is something really creepy about old rugs. They are so unhygenic. Just imagine all those sweaty fungus-filled feet that have tramped over that rag. It is so disgusting that I feel I need a bath just from looking at it.




What does the realtor have to say about this wreck? Lets put it this way; you can always rely on a realtor to say something insanely stupid. This wreak is described as "designer ready". However, the realtor did implicitly concede that there might be something wrong with the current floor covering arrangement. Apparently, there is "wood under the carpet". The realtor also suggests that there is a large yard. Based on the photo above, does anyone agree with that statement?

There is, however, no disagreement about the size of the price. The owner is doing his best to "big-it-up". This dog is on the market for a nasty $800k. Incidentally, that is almost a 100 times more than the house in Pennsylvannia, posted on the previous listing.




I couldn't finish the posting without including this photo. This room is obscenely ugly. Painting a wall dark blue and then putting down some brown carpet must rank as the dumbest home design decision out there.

Thanks to Cara for sending this one. The listing can be found here. There are any other nasty home design features out there. If there are, we need to see them.

More affordable housing




It is not entirely clear which of these Reading (PA) houses are on sale. The price - a very reasonable $8k - suggest that it is the burnt out one on the left. However, the photo is centered on the grey one on the right. Moreover, the listing doesn't mention anything about fire damage. The mortgage on this place is just $42 a month. There are some restaurants in DC where a hamburger will cost you more than that.

Few days ago, a burnt out wreck from Baltimore was posted on this site. That property was listed for $120,000. Baltimore is a city I know well. There are some great people living there, but let us be frank; it isn't San Francisco or New York. It is very tough town. I am less familiar with Reading, but it is hard to believe that life there is 14 times worse than Baltimore. However, that is what is implied by the price differential between two cities.

Of course, realtors will shout out that the difference is location. However, inertia is a more likely explanation. It takes time for sufficient numbers of people to migrate from high cost to low cost cities. Nevertheless, it does happen, which suggests that Baltimore is massively overvalued, while Reading might make a better long term real estate investment.

Many thanks to Jay, who told me that I shouldn't mention that Pennsylvannia is a great place to live. Jay was afraid that everyone in California might sell up and move there. Sadly, that is something I cannot do. Pennsylvannia is one of my most favorite places in America. It is time to sell up and move.

Tear me down




I thought we had reached the limit of teardown madness when I posted a $1 million wreck about a week ago. However, this beachside wreck pushes out the boundary by a further two million. It is listed for $3.3 million. There is one paradox that I can't resolve. How can anyone smart enough to accumulate at least $3 million of wealth be stupid enough to buy this house?

There is no such paradox in the realtor's mind. The write up advises prospective buyers to "drive by, stop and sit on the front steps and experience the incredible ocean ambiance and resort living". In contrast, I advise to drive by and just keep driving.

Many thanks to Bob for this one. Bob suggests that rather than an ocean view, this house is situated in front of a large parking lot that holds about a 1000 cars. The listing can be found here.

Affordable housing




Here is a headline that grabs your attention "Cheaper than a car". This craigslist advert from New Orleans is offering a 3 bedroom house for $19k. Moreover, the house only needs a further $5-10k to fix it up. Compared to some million dollar slums in LA, DC and other overpriced bubbletowns, this house looks rather reasonable. So if you are finding it difficult making ends meet in California, sell the SUV, and move south.

Many thanks to "DHSEscort" for this one. If you know of any affordable housing, send it here

Million dollar bedroom




The new owner of this $1 million dog from Rhode Island better be neat and tidy. There simply isn't any floorspace to pile dirty clothes. While the bedroom might be a little tight, you can console yourself with a sea view.

Marie, who sent in this one, suggested that she had seen more comfortable motel rooms. Personally, it reminded me of the old Soviet Intourist hotel room. If you are unfamiliar with an Intourist room, count yourself lucky.

Here is another oddity, the realtor calls this a "Victorian". The house was constructed in 1935. However, Queen Victoria died in January 1901.

Many thanks Marie for this one. The listing can be found here. Are there any other luxury bedrooms out there? If so, send them here.

Evil exists - it is called the condo conversion

Crackhouses, garden sheds and shacks might be amusing, but condo conversions are evil. They are invariably overpriced and threaten to lure naive investors towards financial disaster.

Yesterday, I received an email from ARMMAT, who sent me details of a typical new development in Brentwood California, which is currently on craigslist. Prices range from the mid-400s up to the mid-800s.





The featured apartment is a particularly tasteless and unimaginative conversion. The kitchen has overdosed on granite; there is even some plastered onto the walls. Why have bay windows, when the view is of a wall? The bathroom had some uninspiring wall-to-wall tiling. The ad also goes very heavy on financing options; "We have in house financing and work with first time home buyers. We can get anybody financed."

That last sentence could be an epithet for this bubble. "We can get anybody financed". It doesn't matter the credit history, income levels, or financial IQ of the borrower, there is a financial institution out there ready to write the mortgage check.

ARMMAT took the initiative to send a quick email to the realtor, who goes by the name of Timothy Lo Bello. Here is the exchange, (without edits):

ARMMAT - Regarding your ad for the above property. At $530K and a 6.25% APR, we're looking at around $3270, 30yr fixed loan at best. Plus $552 for p.tax, and another $2-300 for insurance; grand total being around $4-4.1K per month...FOR A CONDO?

The boom is over...adjust the prices...anyone paying that much for a condo where they don't even own the land is an outright idiot. If they fall for such crookery, then they deserve to be stuck in a $4K payment.

Timothy LoBello - I agree. Were 100% sold out. Go and figure? We have 3 new projects on tap and most are pre-sold. enjoy

ARMMAT - Of course you are...I'd be rich for every single time a broker told me that one...Hurry up and buy! You'll miss out!

If in fact it were true, then there are even more idiots out there than I initially thought...I hope they can sustain their mortgages you put them in as their ARMs run out. Perhaps you're fit for American's Overvalued Real Estate Blog....might be worth the exposure.


The realtor says "Go and figure". I have gone and figured, and I reckon that purchasing this condo is financial madness. What I can not understand is why others can't figure it out as well.

Thanks to ARMMAT for the email and the recommendation. Have you had a similar surreal moment with a Realtor recently.

Movin' out




Imagine, just for a moment, living in a 500 sq ft condo just like this one in Boston. It is a a third floor atttic conversion in an unimpressive single family home, in an unremarkable neighborhood. What exactly would be your quality of life?

The center of the room is the only place that you can stand up straight. The kitchen is tiny. The bathroom is so narrow that you won't be able to wash under your arms. You would have nowhere to store your belongings. Moreover, you would be too embarrassed to invite anyone home. Ultimately, the only thing this condo offers is a life of misery.

If you are asking yourself whether you can afford this $145k condo, then you are asking yourself the wrong question. Instead, you should be asking whether it is time to move out of Boston and find a city where you can afford to live. There are plenty of cities in the mid-west where $144k would buy a respectable family home. Salaries may be higher in Boston than the mid-west, but the difference isn't that great. Contrary to what realtors say, it is not about "location, location location". Rather, it is about quality of life. Currently, many bubble cities just can't offer a decent affordable lifestyle for many Americans. Either the market corrects or it is time to move.

Thanks to Sarah for this recommendation. The listing can be found here.

Gentrifying Baltimore




The realtor must have been sorely tempted to describe this Baltimore dog as a "hot property". Thankfully and tastefully, that temptation was resisted. This fire damaged house is currently listed for $120,000.

Back in the good old days, many houses in Baltimore looked very similar to this one. Along comes gentrification, and houses, which were ignored for decades, become suddenly viable again. Of course, it is great to see urban renewal, but what is really behind it? Have these neighborhoods really changed? Or have greedy gullible investors been duped into thinking that a sow's ear is actually a velvet glove?

So, what are we to make of the realtor's claim that this house is a "Great opportunity to invest in up & coming area!" Look very closely at this photo. In the bottom right hand corner, you will see written "no sitting on steps". Why would an owner feel the need to write that in front of their house? Gentrification is a troubling phenomena. Is it sustainable? Or are people being tricked by realtor hype into buying overpriced crackhouses?

Many thanks to "DC sports chick", who sent in this one. The listing can be found on zipreality.com.

Lets be nice for a change




Recently, this blog has been plagued by realtor-types writing comments suggesting that I am way too negative. The blog is also accused of being homeowner-hating, and too pro-renter. In fact, I am a little surprised by the sudden realtor interest in this blog. For a long time, only bitter renters like myself were checking in and having a laugh at America's real estate wrecks. Previously, realtors were out on the streets cutting deals and had no time to be crusing the bubblesphere. Oh, how times have changed.

In response to the realtor onslaught, I will try to mend my ways. I am now going to try to be more positive and balanced about the houses posted on the blog. Here is my first attempt at being nice.

Here we have a beautiful 2 bedroomed single family home from Richmond (CA) listed for a very reasonable $410k. Selling features? Let us consult the great book of realtor cliches and see if anything might fit this property. We have a) handyman special, b) value in the land, c) location, location, location, d) fixer-upper, e) eat-in kitchen, f) beautiful paintwork, and g) fine landscaped garden. So who is ready to buy? What? No one? Why ever not?

Thanks to Joanne for this one. The listing can be found on realtor.com. I think I have a future writing reator write-ups, send me your most despicable wreck and I will try to find something positive about it.

Seen this one before?




Has this wreck been on the blog before? It is so hard to tell. After a while, these dogs all start to look the same.

This particular 2 bedroomed PoS is situated in Culver City (CA), and it is listed for $740k. The realtor claims it has "tremendous potential". I have always been wary of that phrase. My teachers at school were always telling my parents that I had "tremendous potential". However, I was never entirely clear, what I had the potential for. I sense a similar problem with this property.

Thanks to Bob for this one. It can be found here. Are there any other wrecks with "tremendous potential" out there. Of course there are; there are way too many out there.

Boston shed - $680,000




The following ad has just been posted on craigslist. It seems like a cry from the heart, so I will let the posting speak for itself:

$680000 - Wow.... 25 Square Feet ...... A real investment

You will be the talk of the town in this beautiful shed. 25 square feet of pure luxury....complete with new electrical service provided by a Honda Generator. No water bills...I have rigged the lovely sink/garden hose to feed off of the water fountain in the park across the street. Brand new stainless steel Hibachi providing great cooking and heat. Decorate your sleek TV tray countertops while the frigid Igloo cooler will keeps champagne perfectly chilled. Plush foam rubber adorns the hole in the floor that is the master bathroom. Central AC provided for free by the wind turbine at local 103.

Seem ridiculous? Well this is what most of the homes selling on CL appear like to the average buyer. The boom is over....adjust your prices.

Many thanks to "Big Rock" for alerting me to this one. Any other distressed shed owners out there?

Elegant eyesore




This is a rare listing. The realtor decided to try out some honesty when describing the New Jersey property.

Elegant eyesore on a street of well-kept, stately traditional homes, this bank-owned capecod is embarrasing but a great opportunity. Solid brick walls on a lawn dotted by trees. Spacious floor plan with room for privacy and entertaining. With a little work, you'll be proud to own this home. NOTE: Possible soil contamination.

How often do you get realtors using the word "eyesore"? Basically, this is the crappiest house on the street, so don't book a visit unless you are prepared to have your neighbors look down on you as the local poor folks. Moreover, the realtor is implying that unless you renovate this wreck, you will be embarrassed to be here.

The reference to soil contamination was also rather refreshing. I wonder how the owners of all the other stately homes on the street feel about having a polluted wreck as a neighbor.



So who came out this gem? Say hello to Nancy Quigley. I wonder if Nancy is as brutally honest with all her listings. I have sneaky feeling that she might be.

Many thanks to "K" for this one. The listing can be found here. It is on the market for $204k. While this site specialises in dishonest and misleading realtor write-ups, we are happy to cater for the occasional honest one.

How small can small be?




Perhaps it is the misleading perspective from the photo, but doesn't the garden shed on the right look larger than the property on the left? The weblisting doesn't help much. It contains no information about the actual size of the house. However, it is probably well south of 400 square feet.

There is another photo on the weblisting which strongly implies that this property is in someone's backgarden. There is a much larger building to the left, which has been cropped from this photo. Therefore, we are on fairly safe grounds when we assume that this is some kind of garden shed conversion.

This photo is really showing "old shed, new shed". Walk with me on this one; if a old garden shed can be converted into a house and replaced with new shed, then perhaps, this new shed can also be converted into a house, and in turn replaced with a new shed. But why stop there, why not convert that one as well. Soon, you could have a garden full of conversions.

The economic incentive for this explosive growth of garden shed conversions is certainly there. Since the shed on the left (the white one) is listed on the market for $729k, it must a highly profitable to go down to the garden supplies store and buy a new shed, put it in your garden and sell it for a similar amount.

You are dying to ask; so where is this property? Well, it is located in Northport, Long Island. Before you rush down to the realtor and ask for a showing, please remember that property taxes are rather high in Long Island. The local authorities are asking for $3,106.96 a year. Moreover, there is a village tax of $967.68 per year.

Finally, does anyone know where do the stairs behind the house lead? It is tempting to suggest that they lead to the upstairs bedrooms. But that can't be right......or can it?

Many thanks to Roocat for yet another excellent wreck. The listing can be found here.

Rat race




Rather than living by the water, this property will allow you to live on the water. Located on Lake Union, Seattle, this barge is on the market for $187k. With docking fees costing at least $500 a month, don't think that this wreck offers an opportunity to float away from the financial burdens of homeownership. I wonder if you have to pay property taxes on barges?

What is the life expectancy of a barge? Ten years? Twenty at the most? It could well be that this barge will float to the bottom of the lake well before the 30 year mortgage is paid off. An interest only loan would be even more fun. The asset would disappear, leaving the owner with just pure debt and a bank with no collateral to seize in the event of default.

Here is a question for people living off Lake Union. Is the lake a happy habitat for rats? Around DC, those mobile disease-bags love to waterside views just as much as humans. I can't imagine that it is any different over in Seattle. Will this barge act like a rodent-attractor? That sounds real healthy. Overall, a barge would be a great place to bring up kids.

Many thanks to Katie for this one. The listing can be found here.

Lucy Jordan




Does anyone remember "the ballad of Lucy Jordan?" It was an old Dr. Hook song that recounted the life of a housewife, who one day wakes up and realises that she is trapped in the suburbs. The song goes on to explain that since the option of an international jetsetter was no longer available, she decided to climb onto the roof of her suburban hellhole and end it all by jumping off.

Personally, I always imagined that Lucy lived somewhere like this anonymous $1.2 million San Diego box. If Lucy were alive today, she would also have to contend with crippling mortgage payments, as well as the misery of daily life as a domestic drudge.

Many thanks to Ford Prefect for this one. The listing can be found here.

Say something good.




My dear grandmother always said "if you can't say something good, then say nothing at all". Personally, it was never advice that I followed, but I suspect that the realtor for this property heard something similar from their grandmother.

Since there is nothing inside this property that could possibly make it easier to sell, the realtor decided to take just one photo and keep the details to a bare minimum. There are no granite countertops, new paint or hardwood floors. It is just a plain vanilla wreck. So the commetns are limited to "single family home on a 0.09 acre site." And yes, the realtor did mention one other thing; it is on the market for $420k.

Many thanks to Scott for this one. The listing can be found here. See anything similar in your neighborhood?

The communists are back...




The economic success of America rested on one simple premise; if you worked hard, took risks and made good investment decisions, then you became rich and lived in a big nice house; if you were lazy, risk-averse and made bad decisions, you were poor and you lived in a house like this one here.

The housing bubble has overturned that simple formula. Today, poor people sell 2 bedroomed, 600 sq. ft. shacks, like this one from Newport (CA), to rich folks for $1,150,000. In the process, the underlying incentives to succeed in America are being undermined by massive wealth redistribution from the rich to the poor.

Ultimately, the housing bubble is communism in a modern form. It threatens to turn rich folks into poor people. While the poor may have more cash, they will undoubtedly find ways to spend that money so that they become poor again. Who benefits from this new regime? A narrow elite, known as the realtors. Here is a question open to debate; is the NAR the new Communist Party?

Senator McCarthy once wisely said that "Communism is unamerican". If he were alive today, he would undoubtedly recognise that this housing bubble is also unamerican.

Thanks to Kane for a second excellent recommendation. The listing can be found here. If you see any other communistic unamerican listings, send them here

Thursday, September 6, 2007

Disappointment




Why is this housing bubble so depressing? It is what you DONT get for your money. Here is a crappy little wreck from San Mateo. It is on the market for $1.2 million. With that amount of money, you can't get more than four bedrooms, two bathrooms or even buy a decently watered lawn.

Why is this house listed for so much? It must be neighborhood envy "Well, the 6 bedroomed house down the street went for $2 million, therefore my house must be worth at least $1.2 million". There is only one answer to this problem - a buyer's strike. If no one buys any houses, then prices will come down.

So if you are out there looking for a home at the moment, just stop looking. Wait. Things are going to get better. Prices are already falling in many markets. Soon, it will turn into a collapse. In the meantime, sit back, read the overvalued blog and enjoy.

Grateful thanks to John for this one. The listing can be found here.

Bonus room




The realtor describes this Santa Ana (CA) house as being in a "great neighborhood". If so, why are there bars on the windows. Is it to keep people in or to keep them out? Neither option is particularly appealing.

The realtor also tells us that the current owner has found another house and has said "get it sold". The owner has already cut the price twice. It was originally listed at $590k; it is now down to $565k. That smacks of desperation.

However, it isn't all bad. The house has a "bonus room". Yes, there is a bonus with this one and here it is:




Nevertheless, there must be a worry that the current owner has just cleared out the garage, painted the interior and called it a room conversion. The pile of old tires and rubbish does look suspicious. To be fair, the realtor is hedging their bets. The write-up actually describes this room as a garage-bonus room. Ultimately, it will be up to the new owner to decide this question.

The listing can be found here. This wreck was sent in by ocrenter, who contributes to a great blog called bubble tracker. It is well worth a read and a bookmark. Thanks OC. Is there anything similar out there. Of course, I know that the answer is yes. When you see it, let the rest of us know about it.

Recreational Vehicle conversions




Don't you just love this house. It is a recreational vehicle converted into a beautiful little cottage. What is more, it is Orange County. A great location for just $200k.

The property is listed on craigslist. However, the owner wasn't giving too much away in terms of amenities. He simply described it as a "great starter home".

However, what would the new owner start when they buy this home? Presumably, it is a life on a trailer park. It is easy to start in such a place; it is desperately difficult to end up somewhere else. Alternatively, the new owner could start being the one in ten American's currently holding negative equity. Buy it for $200k today and within a year, it will be worth $20k. Ultimately, this property offers a lifetime of trailer park living, and being upside-down with a mortgage that you can't afford.

This raises another question. Suppose the future owner did default on the debt, would the bank actually foreclose? A year from now, the foreclosure value of this dog would hardly cover the legal fees.

I found this one myself. Trailer park realtor is always good value for money, at least as far as this blog is concerned.

The League of Excellence




This blog has been slumming it recently. It is time to get back to million dollar wrecks. Here is a two bedroom dog from Santa Monica. It is currently listed for $1.7 million.

The realtor claims that this property is a "architectural jewel". Washington DC may have the White House, and Paris has the Eiffel Tower; however Santa Monica has 287 Amalfi Drive.

The realtor also points out that the yard has "room for a pool". Why did the realtor stop there? Why didn't they mention the potential for a helicopter pad, underground bunker or an independent missile defense system?

So who was responsible for this ridiculous write-up? The realtor.com website pointed to Mary Beth Woods. I kept clicking and found her website and here she is:



According to her site, Mary Beth is has been "honored" with membership of the "Society of Excellence". I was feeling pretty good about myself. So I wondered whether I could join this Society. I googled it and found nothing. Therefore, it must be some kind of secret society just for realtors.

What, exactly does the Society of Excellence get up to? I just hope that it isn't one of those strange groups that meet in secret locations, wear weird costumes and form circles and burn things. Suddenly a vision entered my mind. After a difficult week at the office, the realtors gather in the woods, put on the hoods, and burn an effigy of a buyer, while chanting "You will buy; you will buy, you will buy........"

Why do realtors get to have all these neat groups? That is not fair. Why can't I join? So I've decided to set up my own. It is called the "League of Excellence". Anyone can join the league; there are no membership fees; just read this blog regularly and you are automatically a member. However, here are a couple of quick ground-rules; no hoods, no fires and no meetings after 6pm.

Lets get back to Mary. She can now add one more title to her achievement-heavy resume - she is now in the overvalued realtor hall of fame. The League of Excellence sends her the warmest congratulations to her after reaching the pinnacle of her profession. It doesn't get any better than the overvalued hall of fame.

Grateful thanks to Cliff for this one. The listing can be found here. Today, we are looking for silly societies for realtors. If you know of any, send them here.

Fancy a vacation?




This unremarkable 3 bedroom house in Falls Church, Virginia is listed on Craigslist for $510k. Like so much property, it is massively overvalued. Nevertheless, it would not merit a posting, were it not for the somewhat unusual incentive offered by the realtor.

The realtor is offering a one week holiday at an RCI resort, provided the sale is completed before June. Before you start digging into you back pocket for your check book, the realtor tagged on those infamous words "terms and conditions apply". It is one of those offers that states that travel is permitted only the 31st of any month beginning with the letter "j", providing it doesn't end with the letter "y".

Before you even think of vacation, sober up with a fifteen minute scan of the bubblemeter. Prices are tumbling in Northern Virginia. The market peaked last summer and for the foreseeable future, it is heading in just one direction.

Here is some free advice. First, don't buy any real estate until you are confident that prices won't tumble. In practice, that could be years away. Second, if you do feel the temptation to buy. Keep the transaction as simple as possible. Avoid incentives. If you want a vacation, find something on the web, and pay for it with your credit card. While it is debatable whether Realtors are good for anything, it is fairly obvious that they don't make good travel agents.

I found this one myself while surfing during office hours. Got to get back to work now. If you see any other daft money losing realtor incentives, send them here.

Granite guzzler




Many owners think granite countertops is like a real estate steriod. Just install the specky stone into the kitchen and a wreck is transformed from a seven stone weakling into oily skinned 14 stone gym poser. That kind of thinking might have worked a year ago. Today, granite is yesterday’s thing. In 2006, price is the only thing that moves houses.

This house boasts the usual granite tops, stucco and hardwood floors, but so what. Despite the enhancements, the house is ugly, isolated and small. Who wants to spend $695k just to live beside a Toyota dealship called the Toyotathon?

As always, the realtor write-up contains the a couple of mysterious comments. The appraiser thought that this house was worth $750k. Really! So why has the owner dropped the price by $55k? Could the appraiser really be that far out? This raises two difficult but inter-related questions. Do appraisal valuations have any meaningful connection to market prices? Or are appraisals driven by the need to obtain over-inflated mortgages?

The realtor also promises a large 234 sq. ft. unpermitted bonus room. What does that mean? Does the room exist but the authorities don't know about it?

Thanks to Katharina. This one can be found on ziprealty. If there are any other granite enhanced wrecks out there, this blog stands ready to expose them.

A shaggy dog on ebay




This duplex is the our first wreck from an ebay auction. Located in Mt. Washington area of the Hollywood Hills section of Los Angeles, the owner has it listed for $815k. The owner also claims that all serious offers will be considered. Well, I seriously think that this wreck is worth just $500,000. Do you think that the owner will consider that offer? Not at the moment, then just give it some time.

The owners also say that they "are not kidding about that price". They "need to sell" because they are relocating to Connecticut and that "their loss is your gain!" However, the reverse is more likely; if you buy this wreck, your loss will be their gain.

The listing has no fewer than four, seemingly irrelevant, photos of a family dog. There is no suggestion in the advert that the dog thrown in with the house sale. It must be safe to assume that the owner sending the rather unsubtle message that "we are nice people, we love dogs, so please help us out by taking this wreck off our hands". Charity certainly begins at home. However, that charity will start in my home and not in some rancid wreck in L.A currently housing some desperate dog loving wannabe New Englanders.

Changing the subject, does anyone think that the house looks a little lopsided; like it is about to slip into a gorge or down a mountainside? That might explain the sudden desire to move eastwards. LA is certainly a wonderful city, but let us be honest. The ground over there does have the unnerving tendency to move suddenly every now and then.

Thanks to Douglas for this one. It will be listed on ebay for another 8 or so days. However, I am sure that these dogs, both the four legged kind and the one painted blue, will continue to appear on various west coast realtor sites for some time to come. The ebay item number is 4451057464.

First Canadian enters the overvalued hall of fame




Say hello to Lynn Gourley, the first Canadian to enter the Pantheon of realtors - the overvalued hall of fame. Why is she there, you ask? Well, Lynn is the realtor responsible for listing this $50k wonder:



This would seem a case of "what you see is what you get", but Lynn, always the professional, digs deep into the realtor book of selling cliches. This is what she came up with.

"Your chance to own one of the 1000 Islands! Pitch a tent, swim, picnic, hunt, fish, beach your boat. Located near western entrance to International Rift & close to Ivy Lea area marinas. Great views of surrounding islands."

Hunt? Can anyone see any bears on the island? Pitch a tent? Where? Swim in a lake in Canada? Aren't those lakes a little cold, even in summer? Picnic? If an average person were to lie down on this island their feet and hair would be wet at the same time.

Thanks to Walker for this one. The listing can be found here. Lynn has her own website. She is the realtor to choose, when you need to sell rocks, bushes and massively overvalued tiny islands in the middle of nowhere.

Today is Canada day at the overvalued blog. Send anything Canadian here, and we might post it.

Need a roof over your head?




When a realtor says that a house needs "tender loving care" then you know you are looking at something really nasty. This Dania (FL) house lacks an effective roof. In fact, the current owner is currently installing one.

Realtors sometimes say the strangest things. The write up suggests that the value is in the land rather than the building. Then why is the landlord putting on a new roof? Is he putting it up so that the new owner can just knock down?

According to this write-up the tax assessment is incorrect, implying that the plot is bigger than what is recorded at city hall. As good citizens, shouldn't they get down there as soon as possible and let them know that the current owner might not be paying as much tax as he should be?

And how much is the owner asking for? $340k. What? How much? Why? Is the owner mad, bad or medicated?

So many questions, but few answers........

Thanks to Sandy for this one. The listing can be found on realtor.com.

Say hello to the Canadian real estate bubble




Good news. America is not the only country suffering from bubblefever. Our good friends north of the border have also caught the virus. Here is a wonderful "two-up, two-down" from Vancouver.

The property currently holds a tenant, or as the Canadian realtor writes - "a tanant". It seems that Canadian realtors have the same spelling difficulties as their more southerly counterparts. Apparently, the tenant (tanant) is also "very nice". The realtor said nothing about the character of the current owner. However, the picture says quite a bit about his moral standing.

The realtor also tells us that the property is "neat and clean". Unfortunately, the photo suggests otherwise. That matress is certainly full of bugs and other unmentionable Canadian creepy-crawlies. Those blue bags and other sundry rubbish items would be better placed in the municipal rubbish tip rather than the garden.

It is on the market for $468k. Those are Canadian not American dollars. Aren't our dollars worth more than their dollars? Does that mean that our dollar is better? Or am I suffering from money illusion? Are there any economists out there that would like to take up those questions. In any event, this property is overvalued in any currency.

My grateful thanks to Tom for this one. The property can be found here. If there are any other horrible houses that our Canadian brothers and sisters would like to share with us, this blog is happy to oblige.

Update on the great wall of Las Vegas




It is not a good idea to post a property twice. Just appearing on this blog once gives these wrecks way too much attention. However, here are two further photos of the yesterday's wreck from Las Vegas.

Yesterday's posting raised a troubling question. Why did the realtor use a photo of the back wall, rather than one of the front of the house. Well, William's photos provide a partial answer. The front of the house does look rather rough. The pavillion that covers the sidewalk looks ready to collapse, while the windows are rather small and unlikely to let in much sunlight. Well, let us be positive; at least we can confirm that the property has some. That was in doubt yesterday.




The neighbourhood definitely has that post-industrialization chic. In other cities, it prompted some to convert old warehouses into massive condos that couldn't be properly heated in winter and couldn't be cooled in summer. It it not to my taste, but perhaps there is someone out there who might be interested.

Thanks to William for finding these two photos.

The Great Wall of Las Vegas




"Gee, I love the location, but I just wish this house had a door and some windows"

You have to think that there is at least one aperture, perhaps on the sides of the building. However, the realtor write-up gives nothing away on this point. There are three bedrooms, tiled floors and a $265,000 price tag, but no mention of any windows.

Nevertheless, let us assume that the house has an entrance and some windows. Then why take a picture of the wall? Two theories immediately come to mind. First, that this wall is the most attractive feature of the house. Second, that when the realtor took the photo, they was puffing on one of those wacky tobacco cigarettes that are common in the western part of the country.

However, this raises some difficult questions about managerial accountability back at the office. What was the Senior Vice President for offfice management doing when this was planted on the desk? "Oh I see you took a very nice photo of the Clark residence. I'm very pleased that you captured the bush and the toilet ventilation system. Buyers are very interested in those features. The wasteland also gives the picture a very strong foreground. However, I assume it wasn't possible, from an artistic perspective, to give the buyer any vision of how they might actually enter the house? Thought not, and yes thank you, I would like one of those home-made cigarettes".

Thanks to "info" who sent this photo and the listing. It can be found on realtor.com, with an MLS listing of 590014.

Be a loser in the Hamptons.




It the status conscious Hamptons, this wreck won't get you too many invitations to dinner. You neighbors will think you a fool for spending almost a $1 million on a house that previously used to accommodate the servants.

Once your friends hear that you have a vacation home in the Hamptons, you will be under a lot of pressure to invite them for the weekend. However, imagine their reaction when you greet them on the doorstep of this PoS. Their disappointment will be palpable, when you show them into the living room and ask them to help pull out the sofa bed. On Sunday evening, they will leave the Hamptons thinking that you are financially naive. 'What were they thinking when they bought that wreck? They paid how much? Almost a million!". Rather, it will be your so-called friends that will be dining out on stories about your idiot investment up in the Hamptons.

Our thanks goes out to Edward, who sent this wreck in some time ago. However, I sat on it for a couple of weeks. It was originally listed on Corcoran Real estate with a listing number of 44087.

Recently, I noticed that the listing has disappeared, suggesting that either the realtor has relisted it, or that someone has actually bought it. So maybe this posting has come too late to save this fool from the humilation of owning this wreck in the Hamptons. Personally, I am going to take this posting as a learning experience. Don't sit on emails, otherwise, people might go out and actually buy some of this rubbish.

Stairway to heaven




The realtor's choice of photo says a lot about a property. A photo of door and the stairway to another apartment was the best that the realtor could do. With a photo like this one, you just know that this has got to be a classic PoS.

Desperate to find something positive to say about this one bedroom LA apartment, the realtor claims that the "courtyard has lots of greenery and flowers." Well, here is the courtyard.....




I just love the flag; everything else looks like potted plants and peeling paintwork.

Desperation did not just infect the realtor. The owner is also in a rather distressed state of mind. The property has been on the market just seven days. Already, he has reduced the price one.

He may need to be much more aggressive on pricing if he is going to dump this wreck. Why would anyone buy it for $345k when they can rent it for $1,100 per month? The mortgage alone will cost $2,200 while taxes are $190 per month. Then there are condo fees, repairs and insurance on top of that. Like so many of today's listings, the valuation for this PoS just does not make financial sense.

Thanks Mike for this listing. It can be found on zipreality.com.

Garden shed




Occasionally, nasty overpriced wrecks are described as "garden sheds". However, this particularly disgraceful Seattle listing might actually have started its life as a storage facility for horticultural implements. One suspects that if the photographer had turned his camera 180 degrees, he would have gazed upon a typical family home.

And who can blame the current owner of this garden shed. Just install two windows, a door and some inside partition walls, and quicker than you can call a local realtor and say "reasonably priced starter home", he has a $375k property on the market. That is the sad reality when a city suffers from a bubble; sheds become houses, crack houses become single family homes, and beach huts become seaside mansions.

The realtor write-up claims that the property has a formal dining room. This conjures up images of elegant ladies in ballgowns and kindly old gentlemen in dinner jackets waiting for the butler to ring the bell to announce that dinner is served. However, this happy vista of refined living sits somewhat incongruously with the rickety old roof and dilapidated screen door hanging off its hinges.

This gem was nominated by Timothy, who runs a great blog looking at the insanity of the Seattle housing market. You are encouraged, nay required to check it out. It can be found here. As for the property, the non-believers can find it here. Converted Garden sheds are always a source of great alarm for the readers of this blog. However, we don't avert our eyes when confronted with such horrors.

What would the Queen say?




In the past, We have posted some butt-ugly real estate on this blog. However, this wreck is right up there with the worst of them. First, let us start with facts. First, it is on the market for $200k. Second, it is in LA, which explains quite a lot. Third, it is just 299 sq. ft. Fourth, it has a bath, but we're not sure about a toilet. Finally, the plot is just 0.12 acres.

The craigslist ad describe it as a "studio home". However, the realtor.com listing went with "single family home". That, my friends, is a mockery of the Queen's English. A single family home? Please tell me that there is a law somewhere in California that prevents people from bringing up children in houses less than 300 sq. ft.

There are always the skeptics out there, who say "it is not about the house, it's the land value". This time, we have the answer to that feeble excuse. Just go to assessormap.co.la.ca.us and put in the address. Look what comes out:




For tax purposes, the land is valued at just over $4.5k. From here we can go two ways. Either we can assume that Californian tax authorities are just stupid and can't properly assess taxes. Or, the current owner, along with his realtor, have grossly overvalued this property. I know which way I am going.

Many thanks to "ThereMIwhereRU", who sent this one in. Somehow, I don't think that is your real name. Whatever your name might be, we are grateful.

Idle realtor nominated to the overvalued hall of fame.




Here is a somewhat unremarkable wreck from New Jersey. It is on the market for a highly remarkable $1,850,000. What is the realtor commission on that sale? Well, it is over $111,000. So how much effort do you think the realtor put into the write up for this PoS. Here it is, with nothing added or taken away...

"Single Family Property, Area: Brigantine City, County: Atlantic County"

Where is the exaggeration? Where are the lies and misleading sales hype that we have come to love from our nation's realtors. Just nine words? Each of them costing over $12,000 each. I have never seen such idleness from a realtor.



Readers, it is name and shame time. Who is the realtor responsible for this derisory write-up? Here she is, Marie LePera. So come on, Maria. Take the hat off and start scribbling a serious write up.

It is worth checking out Maria's website. Here are some of her recent awards: Circle of Excellence: Platinum Award - 2005, Gold Award - 2003- 2004: Silver - 2002 (NJAR)Prudential Sales Award: Top of the Rock - Diamond 2005; Gold 2003 - 2004; Realtor of the Year, 1999 - ACCBOR. Maria, you can add one more, you are in the overvalued realtor hall of fame.

Changing the subject just slightly and moving onto more metaphysical matters. Maria claims on her website that "Heaven is a little closer in a home by the sea". That makes a change from the more usual assertions about the location of God and his promise of eternal salvation. Recently I told my 4-year-old daughter that heaven was "up in the sky". Previously, I told her that it was in "her heart". She found that completely unconvincing.

Thanks Eric for this one. The listing can be found here.

Watch out! Dog on the premises.




The realtor write up suggests that this property is a "golden opportunity for your builders & architects to make a statement!". Presumably, the first statement will be "tear this PoS down".

Currently, the property has some tenants. But don't worry, the realtor assures us. The tenants are on "month-to-month"contracts. So the new owners can bring some additional misery into the world by turfing a couple of their fellow citizens onto the street. What is more, it will only cost them $850k.

However, the realtor also warns us that the tenants should not be disturbed. They have a dog. Is it wishing too much to think that this dog might be one of those big nasty rotweillers? Hopefully, it is slavishly obedient to its master and it will tear the throat out of anyone stupid enough to buy this wreck and make their owner homeless.

Thanks Eric for this one. Eric is a first time contributor who thought that this wreak might be a little dull. On the contrary, it was an excellent suggestion. For those who would like to see more, the property can be found here.

Waterworld




The current owner justifies the $779k price tag by claiming that this wreck has an ocean view. Therefore, the first task for the new owner of this versatile garage-mobile home will be to chop down one of the two palm trees, that is currently blocking the window. Too bad, I thought that the trees were the most attractive feature. However, in the mad world of realtor valuation water wins over nature everytime.

This house was originally listed for $879k. However, it didn't shift and the owner cut the price by a hefty $100k. Why not go all the way and cut out the first digit. If this wreck were listed for $79k it would still look overvalued.

Thanks Roy for another great suggestion. The property can be found on realtor.com. Mobile homes are always welcome here.

Dust bowl




Sometimes, an overvalued wreck has an almost indefinable quality about it. Take this Watsonville (CA) house as an example. What is it that makes this house so unattractive?

Could it be the thin layer of dust that envelopes the house? Or is the bars on the windows? After all security is important, it is should be gratifying to know that the current owner has taken the issue seriously. Or is it the highway in front of the house, and the ceaseless noise of traffic. Perhaps, it is the neighborhood. Being surrounded by a coterie of similarly awful houses might be enough to push a house into the PoS category.

Whatever it might be, this wreck certainly has it all. Perhaps it has more, we know little about the condition of the house inside. Is it worth almost $700k? Absolutely not.

Thanks Glen for sending this one into us. The listing can be found on realtor.com.

The King of Crap




Here is a property that should have been included on this blog a long time ago. It first appeared on the Marinite PoS website, where it won the less-than-prestigious Golden Turd award. The award goes to the nastiest real estate in Marin County.

This one bedroom, one bathroom property was priced at a tadge below $500k. The Marinite blog readers weren't very complementary. One reader described it as:

"The tar paper roof. The tin smoke stack, the plywood deck, and the foreground wall looks like it is made from fencing. This thing looks like some poor sod went to the local hardware store or scrounged up some stuff and built his own domicile on some land he had. And for something like that you have to pay nearly a half of a million dollars! Unbelievable! Do people not see how insane this is?"

However, the realtor was more circumscribed with their description. They said that the property was: "Affordable opportunity. Fixer upper. As is sale."

Many thanks to the Marinite blog for nominating this wreck. Please check the blog out. It is one of the best around. There is also a sister blog, which is well worth a look.

Wasteland




This Seattle wreck was built between the gap left by two larger houses. It is a nasty one bedroom, one bathroom house in one of the nicer neighborhoods of Seattle.

While realtors might chant "location", the rest of us know that people can be extremely cruel. Status matters in America, and no one wants to live on the worst house in the neighborhood. Living in the smallest nastiest house on the street is just not very ego-enhancing. The current owner of this wreck must feel a terrible inferiority complex when he meets his more comfortable neighbors.

So we all can understand why he wants to sell it. However, our sympathy has its limits. We won't feel quite so sorry him once we realise that he is trying to offload this wreck for $260,000.

According to the realtor write up, the owner almost sold it to a first time buyer a few weeks ago. Unsurprisingly, this buyer pulled out. He probably saw his new neighbors laughing at him when he pulled up to look at the property a second time.

Thanks Bill for this one. The property can be found here.

Lets go through this one more time...




Repetition is the mother of learning, so lets take the "overvalued property makes poor investments" lesson one more time. Our learning objective can be summarized in three simple points:

1. At current valuations, it is not possible to make money from renting property out.
2. The only way to make money is through capital appreciation.
3. If interest rates are expected to rise, property prices will fall.

To illustrate these points, lets take an example of a property from a city that hasn't seen a massive price bubble - Chicago. The property above is located in Lake View, IL and it is currently on the market for $1,279,000. At a 6 percent interest rate, the financing costs are $7,600 per month. Taxes are currently $6,000 per year and likely to go up to $10,000. However, the property has two tenants, giving a combined income of $2,500 per month, with a contract that continues until April next year.

The first point of our lesson is self-evident. A new owner who buys this property will lose at least $5,000 per month if he rents it out. However, can he make money out of the property through capital appreciation? Well, it is very doubtful indeed. The property has been on the market for 84 days, and the owner has already reduced the price from $1,295,000.

We now move to point 3 - future interest rate movements. The Fed has already hiked them 15 times, and most informed commentators expect at least two more hikes. Higher rates mean higher financing costs, lower demand and ultimately lower house prices.

Only a fool would buy this property.

Here ends the lesson. Remember it. Revise it regularly, and if you are tempted to buy, repeat the lesson. Finally, let me set the end-of-term exam and supply a crib sheet.

Question - In a climate of higher expected interest rates, should you buy a property if rental income does not cover the mortgage and financing costs?
Answer - No!

Take the test every time you see a rental property on the market.

Thanks to Ferromancer for this listing. If you would like to provide some additional exam revision, please send overvalued, profitless rental opportunities here.