Cheaper To Tear Down New Homes Than Sell Them
When stories of developers deciding to tear down completed new homes rather than try to sell them come out, you know the region is devastated. That is what occurred in a development in Victorville, a town of 100,000 in San Bernardino County outside of Los Angeles. Ground zero of the housing crisis.
The community was taken over by a bank, the homes were in various stages of construction, from completed to sticks, and the bank realized it was cheaper to bulldoze the whole project rather than complete it. Selling homes in San Bernardino that are not already foreclosed upon is just too hard and the risk of building a home that will not sell is too great for that bank.
What an amazing story.
The homes were part of a planned 16-unit project in this community 100 miles north of Los Angeles. The Texas bank that owns the failed development decided to demolish the houses, a cheaper alternative to completing and selling them.
Forrester was hired to keep thieves away and help sell off the fixtures. “All my life I’ve been building things,” said the 59-year-old construction worker. “It’s kind of fun tearing them down.”
The Victor ville demolition is one of the most dramatic ends to a bad bet made during the housing boom, but abandoned developments have become an all-too-common sight in California. Nearly 250 residential developments totaling 9,389 homes have been halted across the state, according to one research firm. - Los Angeles Times.
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Comment by Portland Real Estate on 5 May 2009:
What a horrendous waste! Maybe they should not start a project that is only half funded and half thought out! What kind of environmental impact is this going to have? Completely clearing out natural land to build something on it, then tear it back down again? This really makes me sad.
Comment by Colorado Springs Real Estate by Kathy Torline on 6 May 2009:
I saw the footage yesterday on the homes being torn down. It does seem like a waste. We also have some developments that were only partially finished here in the Colorado Springs area, then they were foreclosured on. Most of these developments have now been taken over and are in the process of being finished up.
Comment by Tenant Screening on 6 May 2009:
It’s this type of waste that got our economy into the downward spiral it’s in today. I so hope we as a society learn from our mistakes otherwise I fear for what our kids are going to live through.
Comment by Jerry Wilkins on 17 July 2009:
Only a Banker or a government official, or a member of congress, or the president could come up with something this stupid. These assets will sell. They will sell quick if they gather it all together and sell it at auction for cash “as is where is” the cash will come from all over and the losses will be transfered to someone who will have a vested interest in improving the property and try to seek a profit instead of letting it sit there. The key is stop the loss now, and let the free market work. People will go to work, stores will sell inventory,taxes will be paid and the true bottom will be established. Eventually with time the values will go up,and tax payers will not be ultimately responsible for the scam of the developers, bank, and mortgage companies helped out by the government. Of course it will be a big loss to the bank BUT they are losing anyway and this will be a smaller loss. Not even the government with Trillion’s of $ can prop up the real estate market. Bankers, Politicians and the public in general need to figure out that real estate does not always go up in value. This lesson was taught in the 80’s & 90’s and not one person learned it. We would not be here today if the bankers and government had any sense and just said no. If the government does not get out of the way, accept the enivetable losses and let the bankers fail and learn their lesson we will be in this quagmire for the next 20 years.