Builders Giving Up On The Sinking Market

In California, Developers Leaving Behind Housing Projects — And Their Tenants

(CBS)  In California, where developers have been racing to turn farmers' fields into subdivisions, they're now walking away, leaving houses partially built.

Those who have already moved in wondering what will hit next.

“I'm concerned that once the weather starts getting bad, there's tile piled on the roof that could just fly off,” homeowner Marius Gieske told CBS News correspondent John Blackstone.

Dunmore Homes had building projects in a dozen California communities from Bakersfield to Yuba City. Now it’s halted work everywhere, giving up on a fast-falling market.

“We couldn't sell a moving target,” said John Slaughter, vice president of construction and operations for Dunsmoor Homes. “What we wanted to do is stop.”

That moving target, collapsing house prices, has already cut $1.2 trillion from the value of American homes. And the losses are mounting, going to $4 trillion by one estimate, by the end of next year.

So developers are scrambling to get rid of houses they can't sell. Many are turning to auctions.

“You don’t know where the bottom is, and so an auction will tell you if you hit the bottom and where it is,” said Craig Barton of Anderson Homes.

But as Anderson Homes searches for the bottom, those who bought from the developer at the top feel betrayed.

Sherry and Percy Berquist, who paid $597,000 last year were shocked to see $335,000 set as the opening bid for an identical house to be auctioned. The developer may be able to absorb that loss. The Berquists can't.

“It’s gonna be very tough,” said Sherry Berquist.

Across the street Amy Sturdevant paid $585,000 for a house. But now the developer has set $295,000 as the opening bid for similar houses down the street.

“I feel like my parents’ grave has been robbed. This was an inheritance. I sit out here and I look at this…” said Sturdevant.

Those like Sturdevant and the Berquists who bought at the peak may be the biggest victims of this housing bust said Financial Planner Patrick McGilvray.

“That's the real tragedy for the people who got in at the height of the market. They are going to tough it out,” McGilvray said. “They are the ones who are going to carry the water so to speak for this debacle.”

If part of the reason for falling prices is overbuilding, it may not be over yet. While construction has slowed builders are still putting up new homes at a rate of more than one million this year.

[jankebenz]

Sorry but I don''t feel sorry for anyone who bought a house lately at hugely inflated prices. You only served to fan the fires of greed by developers and sellers,and now you pay the price. The writing has been on the wall for sometime and just like golddigger emron investors you''re greed will cost you .

[jn4ggs]

they have noone to blame but themselves.

reminds me of the people who bought into the dot com boom late, stupid, anyone with half a brain could have seen that the prices were outrageously high, espically in so cal.

1000 sq ft 2bed 2 bath condo $400k... yeah that never coming down :p

for every person who got burned, someone else sold high and made out like a bandit.

[downtowner97]

I sold two houses at the absolute peak of the market two springs ago. Now one of those houses is on the market for a lower price than I sold it for. I sold the two to put a good chunk down on a fixer in a more desirable area. Now I have to see how big a hit I am going to take. My next purchase? A live-aboard sailboat.

[tnt1954]

sniffles, isn''t that too bad. they should build
trailer parks instead. california is britney
country. spearhead by speer herself. albert
speer, architect of zee deflationary revolt.
one-star parks are where millions live today,
as they always have. the Greatest Depression
to come isn''t too bad. ya get your ration
at the mission or the church, if ya sit still
long enuff to hear the sermon, a piece of cracker,
the host and a sip of wine. fasting is good for
the soul. they warned us all about this time
period years and years ago. they said, we''d
all be dining on seaweed if we were lucky.
many cautioned against bulldozer bush.
north county san diego, is just an asphalt jungle
now. bulldozer bill horn. are there any jobs
here for people to work at? no, just paper
moving on wall street. most are just ''investors''.
they risked it and lost. if at first you don''t
win, try, try, try again, you can always, lose, lose
lose again. sniffles. where''s shirley temple
when ya need her?

[dubephnx]

The attitudes in this industry that your reporting has exposed, extends throughout our nation and around the planet. The ''pinches'' these business-people place on the consumers also extends into new products and innovations for their industry! Kudos, three-cheers, and keep exposing these out-of-touch with reality and current news; "cloud-huggers"! Can you believe that these guys and gals are going to construct a million homes for the affluent, when the affluent and other victims of hurricane Katrina have needed immediate safe housing for over two years now! This industry has been ignoring a building frame reinforcing improvement that will jumpstart the industry and make it easier to get loans and mrket their products for centuries, and have yet to respond to it yet! Your reporting here really helps us understand why this industry ignores new technology; they are not living on our planet! Thanks, and for more info(not sales)on a really fantastic new way to design and construct building frames, contact me directly or see my website; http://[e-mail]

[thebumboys-2009]

The basics:

Your home is only WORTH what someone is willing to pay for it.
You are not entitled to become tremendously wealthy because you own a home.

"My neighbor sold thier house last year and got rich so I should get rich too"-GONG. We are waiting for this mentality to fade into reality, when the housing market WILL correct.

In a perfect world homes would not be something for people to get rich off of, but, a place to simply live.

[thebumboys-2009]

The basics:

Your home is only WORTH what someone is willing to pay for it.
You are not entitled to become tremendously wealthy because you own a home.

"My neighbor sold thier house last year and got rich so I should get rich too"-GONG. We are waiting for this mentality to fade into reality, when the housing market WILL correct.

In a perfect world homes would not be something for people to get rich off of, but, a place to simply live.

[alphaa10-2009]

This is the priceless moment when our free-market capitalists go into hiding. Gone is their brass band and confetti parade. Once again, they become believers in Killer Capitalism.

They blame it all (of course) on the feeding frenzy of speculation, of being the last in the herd, and first to be set upon by market mechanics. "Too bad," Bernanke says. "How unfortunate."

But fortune has little to do with it. Capitalism is not a benevolent system in the raw, and everyone knows it is kill-or-be-killed, by design.

While those who still can play the market claim ours is the greatest country and economic system in the world, they cannot account for a huge and widening gulf between a monied minority, and what is left of the American middle class.

Nor can they explain why third-world scenes haunt our major cities, with people eating garbage and sleeping over grates (if they are lucky). Or why Americans spend 2.5 times more than EU citizens for what is called "healthcare"-- yet our infant mortality lags behind Cuba.

Capitalism is not a doctrine delivered on golden tablets from above, but a system whose imperfections require constant effort to overcome. To the True Believers of left and right goes this challenge-- we must renovate the American economic system to benefit all Americans by something far better than promises of "rising tides" and trickledown effects.

[shanev137]

I lucked out as well and sold my last house at the peak 2 years ago. I''m been renting a house now that has sat on the market for a year and won''t sell. It''s much nicer and bigger than my old one and my rent is 30% less than my old mortgage payment. I''ll buy again once the market bottoms out.

[whispyseas]

'' ... some get paid to make naked girls disapppear, and some get paid to make them reappear, some build twenty little companys, cause odds say one will hang around awhile, while some build no company at all, as most are too old or too young or too impaired to labor and but hob nob shopgifting grass and dirt for cures for cancer and other margaritas ... ''

'' ... 300 folk in three hundred weekds can forge an easy 90,000 small musuems of medical you are here map song dance skit kit ... ''


'' ... did ya know if everyone earned minimum wage then every home would cost the same, big or small, and did ya know half the world makes less than minimum wage ... 95% of all wealth belongs to the richest 3% of folk, which just makes the biggest treasurys the littlest and the littlest the unavoidable ... ''

[alphaa10-2009]

whispyseas said, " ... did ya know if everyone earned minimum wage then every home would cost the same, big or small, and did ya know half the world makes less than minimum wage ... 95% of all wealth belongs to the richest 3% of folk, which just makes the biggest treasurys the littlest and the littlest the unavoidable ..."
---
A symphony of non sequiturs, and entirely beside the point of recognizing strengths and weaknesses of capitalism in this country.




Posted by whispyseas

[mitywhity]

Wecome to the Socialist''s "Capitalism is Evil" Bulletin Board. Please ignore the fact that capitalism rocks you to sleep every night and wakes you up in the morning by providing you with boundless opportunity to shape your life into however you see fit. From every man''s abundance to every man''s need - whatever. Sounds like a bunch of losers who just want a dignified way to define their financial impotence. Just remember that without capitalism you would have no computer to blog away on - what ever would you do?

[nathan8804-2009]

That''s what happens when stupid people pay 600,000 grad for a home that is only worth 250,000 in the rest of the country. Maybe they got an ARM for a loan then the government could bail them out.

For the Marxists freaks on this site that cannot see the beauty of Capitalism find another site to post your tired and dead ideas. Maybe you should move to North Korea I hear Marxism is alive and well there. Send me a post card of how great it is after a month there.

[pjh139psu]

[Grabs another handful of pop corn and waits for the next installment of "American Life"] Snicker.. Honey this is better than the Marx Brothers.

ME? Oh I bought my house in the middle of the boom. For $24,000. I paid cash. It has 13 rooms. It was built in 1813 by real builders with real materials. I don''t plan on upgrading any time soon. In fact I sincerely hope to die here and not is some Nursing Home. I can easily afford this. Because I can live where I want and don''t have to prove a thing to anyone even myself. No matter what intellectualizations you place on it, it involves ego and self confidence. The more you pay in America? The better you are. And the hole still doesn''t go away in the soul does it?

[brianbwb-2009]

Just remember that without capitalism you would have no computer to blog away on - what ever would you do?
Posted by MityWhity

Wrong, the computers system of representing data comes from a 3,500 year old Chinese invention, the abacus. Electricity is a natural phenomenon, as is magnetism. The Internet started as an interconnected communications system between computers called ARPANET, used by the military and by universities, only recently infiltrated by commercialism.

Capitalism did not create the internet or computers, rather the reverse is true, internet and computers helped further the advance of capitalism.

[brianbwb-2009]

For those crying about the reduction of their house''s value, you worshiped at the altar of a false god, the god of capitalism, and now that god has turned on you. Like it or not, you are now reaping the fruit of your own choices.

I can''t really say I feel sorry for you.

[alphaa10-2009]

MityWhity said, "just remember capitalism rocks you to sleep and wakes you in the morning providing you boundless opportunity... sounds like a bunch of losers..."
---
You missed the point-- no system, including capitalism, is perfect, but for you to react so rigidly suggests you know it all too well. You condemn those you call "losers", inadvertently admitting capitalism has not helped remedy third-world scenes in American cities. Raw capitalism-- as you clear admit-- has no use for the urban poor.

In this, you typify the self-satisfied drone whose only accomplishment is his fervent hope to die with more wampum than his neighbor. However, you know less about capitalism than you think, based on your response-- let alone Marxism.

It was Marx who said, "From each according to his ability, to each according to his need." Your half-blitzed recollection was to suggest it is capitalism that promises "from every man''s abundance to every man''s need-- whatever." Yes, "whatever" possessed you to say that? The ghost of Karl Marx?

And then you will tell Dunsmoore Homes their over-abundance just happens to fit your need-- if they agree to sell at less than half-price. Yes, I know, you expect to find it on eBay...

[oeangus]

For those crying about the reduction of their house''''s value, you worshiped at the altar of a false god, the god of capitalism, and now that god has turned on you. Like it or not, you are now reaping the fruit of your own choices.

I can''''t really say I feel sorry for you.


--------------------------------------------------------------------------------

Posted by brianbwb

LOL, exactly. Well put.

[eggy1620]

Sturdevant and the Berquists are victims all right. Victims of their own foolishness. $600K for a house that%u2019s identicle to a dozen others in a small area? Come on.

[luckygirl042]

Well, I just don''t understand why people have to have a half-million dollar mansion jammed into a circle of other identical McMansions when there are so many nice homes available for a much more reasonable price. Who really needs 4 bathrooms if you only have 1 or 2 kids? I am the oldest of 6 kids, and we grew up in a nice ranch house with only one (gasp) bathroom. We did alright. I just think people made some foolish choices with these horrendous mortgages that they really couldn''t afford. I think it''s much better to live well within your means and have a lot of breathing room which adds to quality of life.

[eggy1620]

luckygirl042, you are a voice of reason, restraint, and moderation. You also are a threat to our consumer driven economy of want, waste, and excess, and you must be silenced.

[djberson]

Oh well, new houses and housing developments are ugly anyway. Maybe I''ll get to look at less of them now. I haven''t seen any quality materials or good design go into a new home in a long time.

[gkc99]

"$600K for a house that%u2019s identicle to a dozen others in a small area? Come on"--Posted by eggy1620


Clearly you''ve never lived in California, like in the Bay Area. That''s about all there is. And housing of some kind is a necessity, you can''t just live in your car for a year or two while the market changes.

That said, when you see endless TV shows about idiots making hundreds of $K by "flipping" houses, you know the smart money is about to separate the stupid from their money. When "everyone" knows a financial fact, it is about to change.

[godseyesore-2009]

Luckygirl042 is spot on. I know many homes and apartments of huge size that are unfurnished just to be able to appear impressive from the exterior. That shows how shallow, superficial, and vain our society really is.
America, land of the looney & lame.

[newsreader2]

What a truly sick and pathetic country we live in.

[slim1h2o]

They could finish some of these projects up, and invite the homeless to live in them. Ya right! said the sarcastic one.

[whispyseas]

'' ... i met someone once what spent a hundred thousand dollars on kitchen cabients, they were real nice cabinets and all, but still very very assembly line cabinets, and i figure if i had a hundred thousand bucks for kitchen cabinets, it''d be more fun to buy a hundred thousands dollars worth of cabinets constructed by drunk and high toolshed carpentry enthusiasts ... ''

[dubephnx]

We all WANT the "American Dreams"! We dreampt about not having to pooper-scooper behind our modes of transportation in the 1700-1900''s, and "wall-a", we developed the horseless carriage! (personal-use cars, trucks, suvs, etc; in today''s languages). We dreampt about talking to each other without having to carry around long strings and tin cans, and we developed the telegraph, telephone, computer internet, and wireless communications!
Where are the dreamers who want houses to stand up strong in hurricanes? Where are the dreamers who want those fancy laser-light security systems in their homes and offices (we''ve all seen them in the hollywood movies)?
These questions are answered by new-tech advancements in building frame design. As building frames have failed in tornados, hurricanes, earthquakes, explosions, etc; for the past 5,000+ years, and a new method of reinforcing building frames has been recently developed that resolves most of these failings in frames, this part of those dreams has been completed! All that remains is the wanting of these dreams by the manufacturers, sellers, buyers, and occupiers of buildings.
Spread the word about "Closed-Nets", and ask for safer building frames! Please note, that when you have a secure building frame, you can then improve the frame coverings, building interior energy efficiency, and air, moisture, bio-hazard, and fire protectiveness of the buildings!

[whispyseas]

'' ... after a few thousand years of technological innovation, i decided that 14 billion year old civilizations probably swim around in their own crafted eternities, and probably figured out that their earth did not come before eternity ... infinite lines of resolution, infinitely fast refresh rate: infinite dances each infinitely small moment ... choose just one to view at a time! ... so joking ... ''

'' ... authorities beg for offices and jobs claiming to be responsible parties ... then when things go wrong, people who never claimed to be responsible are punished while authorities that claim responsibility go unpunished ... if a crime occurs, throw the responsible authority in prison where they belong and the irresponsible people back into the water where they belong ... ''

'' ... little naked girls know, put one naked girl on top of the news desk rallyd round the sick beds playing get well soon and feed the world, and there will be little naked girls on all the newsdesks ... which is why the little naked girls put armed dressed boys on the newsdesks, to give them a sporting chance ... ''

[dubephnx]

Hey! You Builders that are overbuilding; they are still underbuilt in the Gulf States! Katrina, Rita, and Wilma WON! You lost! Channel your anger! Make good out of a negative situation! Grab all of the building frame reinforcing improvements and try them out while doing a good deed for those who will pay for better buildings when they know the price! Closed-Nets are one of the new frame improvement products available to you, and the Gulf States/hurricane regions might welcome an affordable stronger building!

[jetranger7]

If these Supposed Quality Builders didn''t think they had to make several hundred thousand dollars off of each home they sell, to support their Mc-Mini-Mansions that they live in, with their Big Boats and Expensive SUVs, and their Expensive Lake houses, Homes might be selling, but most think they have to make this Exaggrated profit off these homes, and its just ridlicious, how long did they think they could keep this up, everything has a ceiling limit, givin the economy, when they think they have to make a 225,000 dollar profit off of a home, theres something definetly out of place somewhere. I did say Profit of the sale, not the cost of the house itself, its just greed and outlandish behavior thats done this, and living beyond their means to impress everybody around them, WOW look at me a Hot Shot Builder attitude !

[dubephnx]

Hey, Jetranger, take a look at my comments on the Donald Trump Story, too. I''m dubephnx. I agree with your assessment of these builders'' attitudes, and even have been invited to and gone to some of their partys. Trust me, their attitude flaw is even more demonsterous at those shin-digs! If their buildings had ever survived a tornado or hurricane, earthquake or tsunami, without fatalities and injuries to innocent citizens, residents, workers, tourists, etc; I could better accept their attitudal "fronts". To me, these attitudes should be called "Escapism", from the realities that people get hurt in and by building collapses, that these builders do not show in-context angers when a building collapses a/o hurts an innocent occupant or passerby, and ignore or turn down new technologies that improve the frames of their buildings so that the buildings won''t fall down!
See my other comments on this post topic (my 1st was 10/10; 10-10 pm. (got lucky))for more info on my building and structure frame reinforcing systems references.

[tnt1954]

california, once an agricultural state was ruined
by the builders and construction companies. it
is now just an asphalt jungle. where are ya
gonna grow the food dumbo bumboes with bimboes?
where are ya gonna build now, on the moon? mars?
try another galaxy hard hat hijinxers. you''ve
ruined california, what else can you ruin now?
tobacco road? blow it up, start all over again.
enjoy your demolition derby dumboes. all hard
hats are required to be drunken fumbo dumboes.

[my5200-2009]

When home prices in Los Angeles get as low as $335,000, then I''ll wake up. Until then, poo poo to you naysayers, I''ll sit happily on my equity.

[ov442]

slim1, if they invited the homeless to live in them then we wouldnt have any homeless anymore... helloooooo! its our nation''s prerogative, and responsibility to accelerate the # of homeless. Its the christian conservative way to do things.
Ask Ted Haggard. After his scandal while leading the Entire Evangelical nation with his example of ga y prostitution and illegal drugs, he says his 242,000.00 salary last year, and the sale of many assets isnt enough to keep him afloat now and is asking for donations.
What is the world coming to if we dont make rich men spend all their wealth on male prostitutes and drugs huh? c''mon people!!.

[dubephnx]

Hey, ov442, maybe the homeless can be home-schooled in these houses, too! The Donald could send his Eduction Team to each of these homes, and both sides could learn about the American Way, how to install earthquake-proof frame reinforcements, and so on!

[jetranger7]

Ya, well stupid TV Shows like whats on Cable, aren''t helping things either. Where they show that southern builder selling homes for an 86,000 dollar pure profit, after the original purchase and construction price. All thats really doing is setting up some un-suspecting buyer to be deeper in debt for a house that''ll never appreciate, at the rate it was purchased for in many many years. It also drives up the price of older homes to the point that nobody will ever be able to afford them. Soon, all those who have over paid for their houses, will be unable to properly care and maintain their once nice home, they won''t have the money for a new roof, or to repair concrete, or siding, because they''re locked in so deep with the ridlicious mortage,and other expenses of home ownership, that they simply can not come up with repair money, so their houses now begin to deteriote, and loses value for lack of maintenceship. Making a profit is fine, taking it to extremes to support an unreal lifestyle of your own is ridlicious and insane and uncalled for ! Time to face a Reality Check !

[dubephnx]

Right-on(sorry about the 60''s slang), jetranger!

The only way that homes can appreciate again, is the assurity that they won''t be destroyed by tornados, hurricanes, earthquakes, tsunamis, fires, etc!

The only place to upgrade homes for this, is to improve the building frames. Please note that when a house is impacted by 120mph winds, there is about a thousand pounds of force hitting the outside walls, and when this force starts moving the house frame, the weight of the building increases the impacting forces throughout the frame, adding about one-half the weight of the materials of the house, which then blows out the opposite or back wall of the house, among additional force-related actions on the house (roof with less weight than the body sliding slower than the body, etc.).

There is a new reinforcing method that handles these failings in frames, and we are announcing and marketing it currently. This new method even costs less to install than current methods of reinforcing systems.