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Neumann Homes To File Bankruptcy Antioch Homeowners Affected

By David Swierczynski

Industry Observer with Retired

October 24, 2007 01:16 PM

Neumann Homes announced plans Monday to file chapter 11 bankruptcy.

It has been reported that they have laid off most if not all their employees and closed sales, production and customer service offices.

It has been reported that customers with earnest monies deposited with Neumann should get their deposits back through the bankruptcy courts. Customers with homes under way may not be so lucky. Right now would be the time to contact your real estate attorney if you are affected by this unfortunate event.

Neumann Homes is no stranger to the Antioch with two developments currently under way "The Clublands of Antioch" and also "Neuhaven"

As a Realtor living and selling homes in Antioch, these two communities have always been on my "proceed with caution list" since they are/were one of the few developments that saddled homeowners with a costly SSA which inflated the actual price of the homes by about thirty thousand dollars on average. I assumed and counseled home buyers that this SSA would be problematic when the time to sell came about and according to our MLS records, active on market time continues to mount while a large percentage of these homes offered for sale do not sell during their initial listing period and subsequently expire, only to be re-listed in attempts to sell. The absorption rate puts the average home in these neighborhoods currently at 13 months.

Market Statistics CriteriaStatus: Active, Back on Market, Contingent, New, Price Change, Re-activated, Temp Off Market, Pending, Closed, Expired Area: Antioch Property Type: Detached Single, Attached Single Subdivision: Neu, Club (Begins With) Months Back: 6 Months

Active Listings

Detached Single

Bedrooms	# Active	Avg. LP	Avg. MT
All	23	$351,141	170

3	4	$304,000	110

4	18	$352,797	172

5 or More	1	$509,900	364

Attached Single

Bedrooms	# Active	Avg. LP	Avg. MT
3	2	$206,485	132

Off-Market Listings

Detached Single

Bedrooms	# Sold	% Sold	Avg LP (Sold)	Avg SP	SP:LP Ratio	Avg MT (Sold)	Avg LP (Unsold)	% Expd
All	3	30%	$365,567	$351,667	96%	144	$342,071	70%

3	1	33%	$349,900	$348,000	99%	155	$352,450	67%

4	2	29%	$373,400	$353,500	95%	138	$337,920	71%

Neumann has developments underway in these Lake County Communities as well. Grayslake, Lakemoor and Wonder Lake.

To view all homes listed by paticipants of MLSNI go to:

Comments(7)

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Randal Keberlein

Weichert Realtors, Precision - Kenosha, WI

Very well done David. I have never been a fan of this builder.

Oct 24, 2007 01:20 PM

Kim Peasley-Parker

AgentOwned Realty, Heritage Group, Inc. - Sumter, SC

Wow, I know times are tough.... New construction has slowed in our area and the past two months we have seemed to really slow. For our local builders, I am hoping this changes soon. I don't think they could even flip houses right now to earn a buck.

Oct 24, 2007 01:25 PM

Ralph Nudi

Epique Realty - Cape Coral, FL

"Get Nudi and Get Into Your Dream Home"

David - Kenosha has a Neuman Homes development in Strawberry Creek. This will have a huge negative impact on the ENTIRE subdivision and surrounding area, not just the NEUMAN portion.

Oct 25, 2007 12:24 PM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

I am not familiar with Neumann as I am in Virginia but I know a little about Chapter 11. A chapter 11 will just reorganize the builders company, I would keep an eye out for when the 11 is not working and a Chapter 7 is filed. Maybe they will come out of it with the reorganization. Sometimes comapnies file the 11 to buy time and they are not in as bad of situation as you think. In the chapter 11, there may be enough assets to pay for deposits. The project would be sold through the court and all other unsold homes would be sold. To know if the 11 has turned into a 7, when you look up the homes that are left to be sold on your MLS, if owner says "Trustee" or "3rd Party Approval" then it is probably a 7 at that point.

Oct 30, 2007 01:00 AM

Judy Greenberg

Compass - Long Grove, IL

Compass- Long Grove -Buffalo Grove

This is good information since I am your neigbor working in the Long Grove, Lincolnshire, Buffalo Grove and Mundelein area. Are you aware of any other builders in the area, that are filing chapter 11

Nov 02, 2007 11:14 AM

David Swierczynski

Retired - Antioch, IL

RETIRED

Randal-Thanks for stopping by I know you too have consumers facing this dilemma.

Kim-I appreciate your comment, thanks.

Ralph-As I recall, weren't you considering building a home in Strawberry Creek?

Stella-Good information, thanks.

Judy-Hopefully we won't be catching wind of many or any more of builders caught in this situation. Many people suspected trouble especially in light of the SSAs.

Nov 02, 2007 12:18 PM

Concerned Consumer,

"It is unfortunate that this Realtor and others do not know enough about the SSA to be able to sell or explain it."

I have no problem EXPLAINING how the SSA operates. I do have a problem with SELLING IT! Nuemanns' sales tactics (regarding the SSA) were, in my opinion deceptive. Sure those homes looked like a great value but, like you mentioned, add in the total cost of the SSA and where is the value? (Not to mention all the various amenities that will not materialize.)

"The unfortunate circumstances of Neumann Homes was surrounded by an overly agressive purchase of land outside of the Chicagoland area (Detroit and Denver) and was not because of SSA's or communities within the Chicago/Wisconsin area (just read the bankruptcy information)." Perhaps they could have used some of those overly aggressive purchase dollars to eliminate the SSA.

I'm not saying that Nuemanns' problems started with the SSA but if you want some good reading get the minutes from the Village of Antioch meetings. (you can google them) Go back five years and see what those homeowners put up with.

Concerning the extended warranty....Woop dee doo! That's maybe a couple of hundred bucks (for completed homes) Hardly a conselation prize. What about those folks with home construction started but not finished? That warranty is not going to get them under roof.

If you would like to post a link to rhe documents you speak of please do.

Cheers,

Nov 08, 2007 07:37 AM

Neumann Homes To File Bankruptcy Antioch Homeowners Affected

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