Homebuilder Trends: More Small Builders Folding [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Homebuilder Trends

When Your Couch Is on Order and the Company Goes Bankrupt. Washington D.C.: “American Bankruptcy Institute: During H1’08, the number of Chapter 7 liquidations nationally soared nearly 55% higher than the year before. Chapter 11 filings, in which the company tries to stay in business, were up 30%. Locally, housing-related businesses… being liquidated through a Chapter 7 filing so far this year include Adrian Edwards Custom Homes, Reston; Catoctin Custom Builders, Purcellville; Dominion Furniture, Manassas; Eagle Crest Homes, Manassas; Furniture Oasis, Woodbridge; Hoff Remodeling, Gaithersburg; Market Home Furnishings, Oakton; Pavers Plus, Frederick; Prestige Builders, Potomac; Randy's Paint and Decorating Center, Hagerstown; Timberline Design & Build, Annapolis; and W to W Bath Designs, Kensington.” (Washington Post, Sept. 21)

Big Financiers Start Lobbying for Wider Aid.  “Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages… Small banks, for example, are pushing the government to buy loans they made to home builders and commercial developers.” (NY Times, Sept. 21)

Calif Judge Throws Out Home Builders' Suit Over Pollution Rules. “A federal judge Friday threw out a lawsuit filed by the National Association of Home Builders against a San Francisco-area air pollution control agency, which sought to repeal pollution regulations that put restrictions on new development. The regulations established by the San Joaquin Valley Air Pollution Control District are legal, valid and not preempted by the federal Clean Air Act, Judge Lawrence O'Neill of U.S. District Court for the Eastern District of California said in the ruling.” (Easy Bourse, Sept. 20)

Renaissance Homes Faces Bankruptcy. Oregon: “Renaissance Homes expects to file Chapter 11 bankruptcy next week. Slow sales have made it impossible for the Lake Oswego company to remain current on any of its $85 million in bank loans, company officials said. Renaissance will be the third prominent metro-area home builder to file Chapter 11 since May… The shrinking home values and stalled sales that hit much of the rest of the country in 2006 and 2007 were simply late in arriving here.” (The Oregonian, Sept. 19)

Sheridan Homes Gets Back to Business. “It's been roughly six weeks since Sheridan Homes filed for Chapter 11 bankruptcy, and the Plano, Texas-based builder is already back in business… Court documents revealed that Judge Brenda T. Rhoades dismissed the case, effectively allowing the builder to retract its voluntary petition. Eric Liepins, an attorney for the company, said that the builder was able to work out a deal with creditors that allowed the company to continue operating outside of bankruptcy… although he noted that the company could re-file if necessary. Liepins: "They're kind of in a holding pattern." (Big Builder Online, Sept. 19)

House Committee Passes Revised DPA Bill. “A proposal reinstating seller-funded down-payment assistance is expected to move to the floor of the House of Representatives next week, but the likelihood of such programs being resurrected into law appear just as slim as they did last week… The Senate specifically eliminated seller-assisted DPA as of Oct. 1 in its [July] housing bill due to concerns about high default rates on such loans. The updated version of DPA would make such programs available to FHA borrowers who met minimum credit scores, and for those with riskier credit profiles, only with higher mortgage insurance premiums.” (Builder Online, Sept. 18)

Hurd Files Chapter 11. Wisconsin: “Hurd Windows and Doors filed on Sept. 15 for protection against creditors under Chapter 11 of the federal bankruptcy code. Dominic Truniger, president of the Medford, Wis.-based company, blamed the need to file on the high cost of lawsuits that Hurd assumed when it bought its millwork operation.” (Builder Online, Sept. 18)

                                                             

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Comments

[CLH:]

The removal of many builders is necessary. We wont need any new homes for many years. America is not reproducing. No babies no homes needed. Capitalism will adjust.

2008 Sep 23 07:01 AM

[notsosmart:]

be careful where & what you buy.be careful with deposits.

2008 Sep 23 11:27 AM

[Responsibility:]

To encourage people to be responsible, we should have tax penalty and special points for future loans on load defaulters and tax incentive to people who keep their mortgages, to those who take on new mortgages, and to those who increase their mortgages, similar to tax on big cars and incentives for small/hybrid cars. Please spread this if you agree so that the politicians will do something.

2008 Sep 23 02:21 PM

[Responsibility:]

To encourage people to be responsible, we should have tax penalty and special points for future loans on load defaulters and tax incentive to people who keep their mortgages, to those who take on new mortgages, and to those who increase their mortgages, similar to tax on big cars and incentives for small/hybrid cars. Please spread this if you agree so that the politicians will do something.

2008 Sep 23 02:27 PM