Listings Near IndyMac Bank: Front Row Seats for the FDIC Takeover

bank-hammer.jpgSeveral luxury condominiums and townhomes are for sale in Pasadena within a few blocks of IndyMac Bank, the latest casualty of the burst housing bubble. Pasadena Star-News blogger Larry Wilson was across the street as federal agents took over, and commented:

The blame goes, in order, to 1) The bank. Making hay by making loans to people who couldn’t possible repay them was unconscionable, not to mention bad business in the long run. 2) Wall Street. Our nation’s financial geniuses encouraged the fraudulent lending by telling thrifts they’d create a complicated new kind of commercial paper in bundled mortgages — the more mortgages, the better. In so doing, they’ve tanked the markets for the rest of us. Some made out like bandits and are laughing on East Hampton lawns as they read the news from Pasadena. For the rest of us schmucks, that’s real money we’re losing in our 401(k)s, ya creeps. 3) Home buyers who took out the loans and went along with the prodding from mortgage peddlers to lie about their incomes and assets in order to move into the mini-manse in the sprawl.

From its conservative perspective some sixty miles away, the Irvine Housing Blog weighed in on the action and its repercussions:

With all of the Alt-A crap on their balance sheet, this shouldn’t be terribly surprising. They only thing that surprises me is the fact that most of the Alt-A loans have not reset yet. The toxic waste they own is going to get much more toxic.

The toxic waste is even starting to poison Freddie Mac and Fannie Mae. The GSEs will be saved, and it is the mechanism for getting the American Taxpayer on the hook for the housing debacle. I can’t say I am too surprised about that one either…

And from across the country, in Massachusetts, a blogger who has followed the housing bubble with concern posted the forceful letter he wrote to his representative in Congress complaining about poor government oversight and judgment:

To be blunt, I believe your inability to see the true nature and severity of the state of this issue not only represents a failure on your part but also truly embodies the extent to which our federal government has mishandled this economic crisis and more generally strayed from the path of prudent, deliberative and sound regulatory and legislative process.

However, I don’t believe your lack of understanding or our government’s overall failure to properly address the economic crisis to date represents a complete failure.

To the contrary, it appears plainly obvious that the worst and most dangerous legislative blundering has yet to come.

The sun is still shining in Pasadena today. The neighborhood around the bank, just north of Old Town, seems to have a lot going for it, although listings are sitting on the market for months. With the dramatic contraction in capital available for loans, sellers can’t expect any better. On the other hand, the average asking price for units here seems high for the surrounding atmosphere: above $500 per square foot, according to Redfin.

With the exception of one single-family home for sale by owner, listings closest to the bank are all condominiums or townhomes:

703 Locust Street #6
$469,000 (originally $499,000)
2 bed/2.5 bath
1,246 sq.ft.
$376 per sq.ft.
On Redfin 88 days

700 E. Union Street, #105
2 bed/2.5 bath
1,811 sq.ft.
$494 per sq.ft.
On Redfin 215 days

931 E. Walnut #505
1 bed/1.5 bath
1,146 sq.ft.
$535 per sq.ft.
On Redfin 33 days
This and the 2 units below are in a new building at Lake and Walnut.

931 E. Walnut Street #118
$686,100 (originally $736,100)
2 bed/2.5 bath
1,523 sq.ft.
$450 per sq.ft.
On Redfin 33 days

931 E. Wanut #431
$474,600 (originally $534,524)
1 bed/1 bath
949 sq.ft.
$500 per sq.ft.
On Redfin 38 days