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New Homes In California Being Torn Down

By
Services for Real Estate Pros with TheHousingGuru.com

If you want to know just how bad the housing market is in some areas, visit Temecula or Victorville, CA. Local officials, frustrated over the condition of foreclosures in their cities, began imposing stiff fines to banks that allowed their foreclosed homes to fall into disrepair. And some banks, many of which have been shown to be poor property managers, have taken the easy way out. Bulldozers have been called in to demolish more than thirty new homes in various stages of completion.

 

However, in the city of Indio, local leaders have taken a more proactive stance and are working with banks to avoid such a housing disaster. Indio’s officials and police are monitoring vacant homes and immediately contacting bankers to notify them of conditions needing attention. Vacant homes are required to have a contact number posted to simplify the notification process. With the threat of possible fines, and with regular contact from city officials, Indio has dramatically improved the condition of its vacant properties.

 

With the current state of the economy and the continuing glut of new homes, let’s hope banks and city officials can find a workable situation to help avoid the needless destruction of more houses.

To see a video on this destruction visit, CalculatedRiskblog.com

 

For the latest information for those interested buying, selling, building, remodeling, or repairing homes, visit: www.TheHousingGuru.com

Comments(104)

John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

John, I understand that there were ongoing fines and that the homes had been vandalized, however, some of the homes were almost complete--4 were models--and the costs should have made it economically feasible. Sounds like a case of taking the easier route.

May 03, 2009 06:39 AM
DeAndrea "Dee Dee" Jones
Samson Properties - Manassas, VA
DMVRealEstateChick

If they have the money to bulldoze newly constructed home, they should still be fined for waste.

May 03, 2009 12:29 PM
Kelsey Barklow
Hurd Realty - Johnson City, TN
423/948-9154

Maybe someone can help turn those semi-completed homes into Habitat for Humanity houses, or something along those lines. I hate to hear that so many are being bulldozed down. Thanks for this update.

May 03, 2009 01:05 PM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

That's really a shame but the banks are obviously not good landlords or guardians of these homes.  I can understand tearing down homes that create blight.  They can be dangerous to the neighbors and the area kids.  Not to mention you have the squatters who just move in.

May 03, 2009 01:43 PM
Lee Ali
Las Americas Real Estate - Fairfield, CT

I respectfully disagree with Russ Ravary's suggestion that "Bulldozing some of the homes may be great idea. Too many homes and not enough buyers is a big problem here."

Having worked as a rehabber and a proud housing provider for hundreds of tenants in the past several years, I just cannot fathom the idea of demolishing a house unless it is beyond repair.

Demolishing a house for "business" reasons does not make sense to me. No way, no how.

Someone needs to take that bank to task. The bank may just have pull that stunt to put the city on the back foot.

May 03, 2009 03:49 PM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

DeAndrea - It's certainly not a "green" solution, a bit surprising in CA.

Kelsey - There had to be some good use for them other than food for a landfill.

Lyn - We've seen how banks manage real estate. Their record of dealing with short sales and foreclosures has been dismal.

Lee - It seems to me that the bank's actions were shortsighted and very bad for PR. I've done a lot of rehab work too and know that almost any home can be salvaged.

May 04, 2009 01:24 AM
Kat DeLong
Realty ONE Group Mountain Desert - Prescott, AZ
REALTOR

John: Kat here, again.  I just spoke with Patrick at the Daily Press in Victorville who wrote the story, and he confirmed it all. All the homes were built and owned by Mathew Developers and four were completely finished model homes.   As far as Temecula, he hasn't been able to confirm that as if yet.  

This is certainly SAD story!

May 04, 2009 04:52 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Kat, I'm just finishing some research on more home demolition. It's definitely a sign of the times.

May 04, 2009 05:57 AM
Kat DeLong
Realty ONE Group Mountain Desert - Prescott, AZ
REALTOR

John: this news is FINALLY on our LOCAL news, KTLA And YOU broke it first... to me anyway.

May 05, 2009 02:37 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Kat - "All the news that's fit to print." That's our motto : )

May 05, 2009 03:22 AM
Kerry Jenkins
Prime Properties - Crestline, CA

They could have dropped the price on the homes, or I would have gone over there to take out the windows and drywall...we need to redo ours and want to finish off a basement and add a bathroom and another bedroom.  Theywould have saved the money to tear the house down and I would have saved about $10,000 in material costs.

RIDICULOUS

May 05, 2009 05:48 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Amy - Not everyone uses their heads. Banks wouldn't be in trouble if they had acted responsibly.

May 05, 2009 05:56 AM
Carrie Sampron
Home Smart Realty Group - Highlands Ranch, CO
ABR SFR & Kathy Sampron (303) 931-3629 Highlands R

John:  This is just tragic.  Certainly someone could have come up with a way to make these homes more valuable to the community if they were not going to be sold anyway.

May 05, 2009 09:36 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Carrie & Kathy - I just can't believe they tried to consider the alternatives, and considered only the consequences that benefited the bank.

May 05, 2009 01:09 PM
Jim Dvorovy
Cutler Real Estate - Canton, OH
REALTOR - Canton Ohio Real Estate

Sort of reminds me a similar program where late model automobiles were supposedly bought up and sent to crushers in order to reduce the supply and availability of good used automobiles. With reduced inventory, more new autos were sold.

May 06, 2009 04:01 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Jim - Strange you mention cars; they're working on that one too with the "cash for clunkers" program.

May 06, 2009 05:17 AM
B Boronat
Looking - Eugene, OR

I have seen that in many other states too!  Ohio for example has had this very problem for several years now.  Such a shame!  Now the banks own only the lots...

May 06, 2009 11:07 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

B. Boronat - Yes, it is happening in other locations and will probably continue.

May 07, 2009 03:22 AM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Several cities out here have passed legislation requiring the owners to take care of vacant properties. I have not heard if tearing the house down and taking care of a vacant piece of land is an option. Considering how much value a house adds to the land, I suspect that no one here is going to be tearing down a house anytime soon.

May 08, 2009 04:01 PM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Jim, the video I posted has now made it to national news. In this case the bank was allowed to destroy the homes and apparently did it rather than spend what was necessary to repair them.

May 09, 2009 06:13 AM