New home construction causing "ghost towns"?

flippinout · #1 08-13-2008, 04:15 PM

Many families have been experiencing just what Scott McDonald and his family have run into after moving into their newly constructed home.

There had been 179 homes planned for construction in this neighborhood, but when the McDonalds moved in, there were fewer than 15 completed homes.

Newly constructed homes accounted for 23% of all homes purchased last year, but builders have seen construction loans called by banks, or they fail to sell newly constructed homes fast enough to keep up with loan payments for construction.

Some builders are suing in some towns to have their loans reinstated so that they can complete construction of projects that have already been started. Newly constructed homes just arent selling as fast as they did, in fact, it is taking on average twice as long to sell as it did in 2006.

Because of these unfinished projects in which some families live, their property values have dropped dramatically and they can only hope that these projects are completed to put their property values where they should be.

Not knowing what will become of these neighborhoods as far as completing construction is concerned, is very unsettling for the people that already live there.

missmanors · #2 08-13-2008, 06:32 PM

I can imagine that there are many of these planned neighborhoods that are now sitting almost empty in our country. With the housing boom that we'd experienced, there were so many of these homes being built on tracts of land, and builders were optimistic that they would recoup their money quickly since almost any borrower was able to get a loan whether they could afford them or not, the builder was almost sure to get their money from the construction.

Then when the banks started falling apart from the backwash of the defaults on the loans, and the lenders then tightening up requirements for loans once again, it's bound to have a huge effect on these "almost constructed" neighborhoods.

flippinout · #3 08-14-2008, 09:08 PM

We have a situation like that really close to where I live. A bunch of land was bought for apartments and new houses and only a very few houses have been built so far.

None of the apartments have even been started yet. And since this is in a countrified setting, you would think that people would be very interested in getting a place there.