Then, it was Church Hill.
It’s not necessarily the construction, or the lack thereof … it’s the land.
The economics of the circumstances are simple. The local home builder, in most cases, has to borrow money to purchase land. Land acquisition was the most challenging part of being a homebuilder during the boom. Often times this land was purchased years before it was ready to be improved. Many, many homeowners who bought at the top of the market, who now need to sell, are upside down in their mortgages. This is the same problem for the builders. The land has depreciated to the point that the sum of the land, materials, labor, and fees are greater than the market value or sales price. It’s not always that the builder spent his money on something other than the subs who worked on the home. Sometimes, there just isn’t enough money to pay everyone. The argument that everyone should have seen this coming is pointless. We have arrived, and there are A LOT of people impacted by this real estate market. Especially for those who make a living buying and selling real estate.
One thing I’ve been pondering for a while, and now it’s even more clear – what obligation do builders/developers have to disclose to buyers their financial circumstances?
* I know … I’m breaking my self-imposed hiatus … there is so much more I’d like to write, but I’m off to continue to deliberately not blog …