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.

[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.

[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]

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!

[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!!.

[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.

[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.

[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.

[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! 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!

[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]

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]

'' ... 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 ... ''

[slim1h2o]

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

[newsreader2]

What a truly sick and pathetic country we live in.

[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.

[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.

[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.

[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.

[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]

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.