Big Bear Bummers

Address: 42769 La Placida Ave, Big Bear Lake, CA 92315

Link: https://www.zillow.com/homedetails/42769-La-Placida-Ave-Big-Bear-Lake-CA-92315/17620340_zpid/

Beds/Baths: 1 bed, 1 bath, 360 squares

Purchase Price (11/2021): $323,000

Asking Price: $350,000

Difference: +$27,000

Commission (3%): -$10,500

Total Gain: +$16,500

In February 2021, right in the heart of the pandemic frenzy, this place sold for $187,000. Pretty decent deal, although not so much when you consider that it’s only 360 square feet (yes, you read that right). I’ve lived in some tiny apartments in my day, but a place that small would give New Yorkers claustrophobia.

Anyhow, the new owner gave it the A.S.S. treatment (Airbnb Standard Sprucing) – white paint, ripping out kitchen cabinets and replacing them with open shelves to collect dust bunnies, and industrial lighting and hardware – and re-listed it six months later for nearly double ($349,000).

Amazingly, they found a sucker to pay $323,000.

And now that sucker, the current seller, is trying to get out of their horrible investment.

These fools paid over $900 per square foot during the pandemic frenzy and actually expect to get out of this mess for break even. What they fail to understand is that kind of valuation was only possible during a speculative bubble. This thing was never worth $323,000 in late 2021, and it sure as hell isn’t worth $350,000 four years later.

The level of delusion here is astounding.

First of all, anybody who wastes time with “aesthetic” photos like this is really high on their own supply:

Second, their pricing strategy, borne out of a desperate desire to avoid admitting they overpaid, completely ignores how much things have changed in the last few years. Not only have insurance costs exploded, but interest rates have doubled.

It’s an entirely different environment and buyers for these microscopic cabins, at these prices, simply don’t exist. I want you to look at this payment, and remember that we’re talking about a ONE-BEDROOM, ONE-BATH, SUB-400-SQUARE-FOOT CABIN.

Purchase price: $350,000
Down payment: $70,000
Monthly nut: $2,321/mo (@7%)

No way.

The only thing this place has going for it is that it’s in Lower Moonridge, which is a fairly desirable area. But it’s on a postage-stamp lot and the house is extremely cramped inside.

These sellers are in for a rude awakening.