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Posted Aug 2, 2008, 12:03 AM
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Join Date: Jun 2006
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After the Bubble, Ghost Towns Across America
Quote:
After the Bubble, Ghost Towns Across America
Half-Built Subdivisions Are Lonesome Places;
'There's Just No Noise'
By ALEX ROTH
August 2, 2008
BENTONVILLE, Ark. -- Dennis Pflueger and his wife won a rent-free year in a nice new house in an expensive subdivision not far from the headquarters of Wal-Mart Stores Inc. As part of the prize, they then have the option to buy the four-bedroom home for $452,000.
Mr. Pflueger, a telephone-cable installer who describes himself as an "old redneck," is in the middle of his free year. But the Pfluegers are a bit lonely. Just one other family lives in any of the 28 new or unfinished houses on Foxboro Court. Up the street, a sign announcing "Elegant Homes" sits on a lot choked with weeds. The block is as quiet as an old ghost town.
Since real-estate tanked, many new planned communities across the country are half-empty, with for-sale signs outnumbering residents by a large margin.
Some of the projects abandoned by bankrupt developers are in places that were hotbeds of new housing construction: Southern California, Atlanta, Las Vegas, Phoenix. As of July, the percentage of vacant housing stock available for sale or rent stood at 4.8% nationally, the highest figure in at least 33 years, according to Zelman & Associates, a real-estate research firm.
Daily life in these developments seems a bit post-cataclysmic. Children play on elaborate but empty playgrounds. They walk their dogs past rows of shiny houses that have never been lived in. Voices echo up and down the block. Unfinished houses and vacant lots strewn with construction debris clutter the horizon.
Robert Waltenspiel lives with his wife and two daughters in a unfinished subdivision in Auburn Hills, Mich. Standing in front of his house, he can see more than 30 weed-choked lots where new houses were supposed to go. The developer halted construction more than two years ago.
"As far as working on my yard and saying, 'Hey, neighbor, want a beer?,' that's not going to happen," says Mr. Waltenspiel, an account manager for Hewlett-Packard Co.
The hot tub at the community center doesn't work. The communal fountains are dry. Mr. Waltenspiel's kids have no one in the subdivision to play with, so he has to take them to a nearby park for social interaction. His 4-year-old "will walk up to strange girls in the park and say, 'Hey, will you be my friend?' " he says. "A, it's adorable. B, it's sad."
In the past year, roughly 15% to 20% of residential developers have gone out of business, suspended operations or changed their line of work, according to an estimate by the National Association of Home Builders.
The people who bought into these subdivisions encounter all sorts of other unexpected problems, including burglars looking to steal toilets, appliances and copper wiring. And blight. Krista Anderson, an administrative assistant, lives in a subdivision outside Phoenix where the developer suddenly halted construction last fall, leaving behind not just unfinished houses but also scaffolding, piles of cement and construction material that "is turning yellow and looks bad."
Many residents aren't sure exactly who is in charge of mowing the weeds, maintaining the street lights, cleaning up when someone uses open space as a dump.
Some residents form especially tight bonds with neighbors 10 or 20 doors down the street. Others relish the peace and quiet.
"With my art and my books, I don't need to go outside," says Miriam Ramirez, who lives with her husband, a retired doctor, in a stalled subdivision in suburban Atlanta. "But not everybody's like that."
Her subdivision, Woodbridge Crossing in Smyrna, 15 miles from downtown Atlanta, was supposed to consist of several hundred garden-style houses. Instead, she lives on a street where most of the roughly 30 units have never been lived in. It's the only inhabited street. Paved roads surround acres of empty lots. At night, she says, Woodbridge Crossing can feel a bit like "a cemetery." One plus: She usually has the community swimming pool to herself.
In overdeveloped Northwest Arkansas, real-estate officials estimate that property values have been steadily declining since 2007. Early in the decade, the region saw a population explosion as more than 1,000 people a month moved to Bentonville, Rogers and several nearby communities to work for Wal-Mart or one of its 1,250 locally based suppliers. Developers began building new houses at a frantic pace, carving up sprawling farmland into fancy developments with names like Stone Meadow and Kensington Hills.
Then the housing market collapsed. Soon developers were defaulting on their loans and declaring bankruptcy. In May, federal regulators seized one Northwest Arkansas lender, ANB Financial, whose portfolio was overloaded with bad construction loans.
Now, many of the region's new subdivisions, with houses that can't be rented, much less sold, are forlorn monuments to disastrous real-estate forecasting. A subdivision called Tuscany, five miles west of Bentonville, was envisioned as an enclave of luxury homes with landscaping meant to evoke an old-world Italian village. Developers installed an enormous hand-built stone wall surrounding several hundred acres of what had been cow pasture. So far, only five houses have been built, and just two sold.
Carol Trees, who paid $570,000 for a 4,800-square-foot house six months ago, admits the solitude is a bit disconcerting. The good news is that her three children have the run of a pasture longer than several football fields. "We love it right now," says Mrs. Trees, a nurse practitioner. "We sit on our back porch and fantasize that we own all this land."
Then there's Quail Ridge, the temporary home of Mr. Pflueger, his wife, Joyce, and their 11-year-old chihuahua, Peaches.
Real Estate Company of Arkansas, a local outfit, had been so eager to sell units that it raffled off a year's free rent for one house. On a cold weekend afternoon last December, more than 1,000 people showed up at the subdivision in hopes of winning the prize.
As a marketing effort, the event was a total bust. "We didn't sell one house," real-estate agent Michael McKinnon says. "We didn't get diddly."
But for the Pfluegers, who won, the outcome appeared to be nothing short of divine intervention. Mr. Pflueger had been out of work for eight weeks. Unable to afford the rent for their $475-a-month apartment, the couple was planning to move into a trailer in their daughter's back yard.
Suddenly they were moving into a new 3,400-square-foot house with an entertainment center, an outdoor hot tub, stainless-steel appliances and more than enough room to store the 61-year-old Mr. Pflueger's collection of guns and antique fishing reels.
The last seven months have been an odd existence. Chickens wander by from a nearby farm, poking around in the brush. Not long ago, someone broke into one of the unoccupied houses around the corner. Now the Pfluegers say they pay close attention to passing traffic, but hardly anybody passes by.
"There's just no noise," Mrs. Pflueger said.
When their 12 months end, the Pfluegers will move on too -- perhaps to that trailer on their daughter's property. Mr. Pflueger recently found a job but still can't afford to buy the house. "That's way out of my league," Mr. Pflueger says. Unless someone else moves in, only one family will be left in the 28 houses on Foxboro Court.
Write to Alex Roth at alex.roth@wsj.com1
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Source: http://online.wsj.com/article/SB121763228998406131.html
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