PVC or Poly Farms - Do You Know What They Are? You Should!

By
Real Estate Agent with Crye-Leike REALTORS® 165062

PVC Farm or Poly FarmDo you know what a "Poly Farm" ofr "PVC Farm" is?  You better learn quick!  "Poly Farms" refers to the unfinished subdivision lots where green PVC sewer pipes sticking up out of the ground in unfinished subdivisions and abandoned developments.  They are called "farms" because they appear to be growing out of the ground.  The only other growths are the weeds that are growing up along side of them.  We certainly are not speaking of construction growth.   These unfinished subdivisions developments with green pipes sticking up from the ground are a visible eyesore all across the Atlanta landscape.  For those that understand Atlanta real estate they  send a warning, that purchasing a home in some of these subdivisions may not be a smart idea.  What at first sounds like a great deal, may be your financial Waterloo.

Suppose you purchased a home when the subdivision was just starting at $400K hoping to sell when the subdivision starts to mature by undercutting the builders new pricing, and selling a loaded home well beneath the new construction phase, and still making a great profit.  Today the risk is that if you purchase a home even at a discounted price, the builder may not be able to finish the subdivision, or he may under cut your 400K purchase by introducing a new product, perhaps a ranch home that is priced substantially below your acquisition cost.  Suppose the builder undercuts your 400K and introduces a 275K home?  That is a major hit to your equity, and salability.  If the development you purchased in goes bankrupt there are other issues, what about the amenities?  What about vandalism and crime?  What about the builder warranties?  What about if the bank sells off the remainder of the subdivision to another builder that decides to build homes less than half you price?  In simpler terms, your screwed!  You may have purchased a home that you cannot sell until the market comes back.  In the late 1980's the real estate market in Atlanta collapsed, and the town was loaded with unfinished homes.  In the 1990's it took almost 1 full decade for homes in many of these types of neighborhoods to regain their equity.  Most new agents do not understand the risk, and cannot advise you correctly.  The Atlanta market had several collapses one in the 1970's, and another in the late 1980's.  The scope of this correction is much worse than either of those 2 corrections.

An experienced agent that is working with a buyer will educate their clients that not every deal in real estate is a bargain.  If it sounds too good to be true, it probably is a loser.  Foolish buyers may be left with a subdivision with uncompleted amenities, and have to maintain a disproportionate share of maintenance to keep the neighborhood from looking like a vandalized foreclosureville.  The time to ask for advice is before you buy a home, not after.  If you look around there are other warning signs all over the place.  It is smart to pay attention to the signs, if you don't...it will cost you!

Posted by

James Crawford ABR, Broker Associate

 

 

 

 

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Tags:
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Rainmaker
388,519
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Jim not only in Atlanta.  We have streets that leed to nothing.

Jul 01, 2008 01:22 PM #9
Rainmaker
57,925
Diana Corcoran
Berkshire Hathaway Home Services Hudson Valley Properties - Rhinebeck, NY
Rhinebeck Real Estate

Jim: which builder is it that closed its doors?  A local or national builder?  You are helping my daughter in the purchase of her first home and I can tell you this all very scary to me as a mother...glad you are there.

Jul 01, 2008 01:47 PM #10
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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John Walters (Specialized Real Estate)  I was out previewing today, and was shocked at what I was seeing.  Construction for the most part has stopped, and weeds are taking over!

Jul 01, 2008 01:54 PM #11
Rainer
920
Fran E Orr
Coldwell Banker Residential Brokerage - Alexandria, VA

Thats as new phrase for my lexicon... fortunately we don't have many of those in the close-in DC Metro area.

Jul 01, 2008 01:56 PM #12
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Diana Corcoran - Rhinebeck Real Estate (Paul Hallenbeck Real Estate) The builder in the news these days are  Robert Harris Homes.  On the news this evening they mention most buyers will lose deposits.

Jul 01, 2008 01:58 PM #13
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Fran E Orr (Coldwell Banker Residential Brokerage)  It is a suburban thing for a new homes subdivision.

Jul 01, 2008 02:07 PM #14
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Jim...

I have never heard that expression but I have seen way too many of them in the area. Those pipes are sticking up everywhere!

Jul 01, 2008 02:10 PM #15
Rainmaker
658,862
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

In these situations experience is so critical.  If you have not lived through a few different markets you will not know how to advise your clients.

Jul 01, 2008 02:46 PM #16
Rainmaker
227,896
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Good post Jim. Sounds like our market. Please post this to the mortgage fraud group. We've talked about these new home issues before. The builders are caught in a no-win situation in addition to the buyers. 90% of our sales are REO properties with months more to come. We went thru a similar cycle  from 1991-1996 when our cities (Murrieta & Temecula) were 1/5 today's size. You're gonna pay for the experience one way or another so you may as well hire an experienced agent rather than buy yourself an experience.

Jul 01, 2008 05:02 PM #17
Rainer
208,683
Bob Cumiskey
A1 Connection Realty, Inc. - Sun City Center, FL
US Army Retired, Your Sun City Center, Florida ~ Realtor

Jim, I'd never heard of a poly farm before, but now I know.  Something new learned today. Thanks.  Also,  ...    "If it sounds too good to be true" ....  was one of my Dad's favorite expressions.

Jul 02, 2008 02:21 AM #18
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Jim Crawford
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Bob Cumiskey, US Army Retired, Your Sun City Center, Florida ~ Realtor (A 1 Connection Realty, Inc.)  I've posted a picture for all to see why this term is used.  Buyer beware!

Jul 02, 2008 08:41 AM #19
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Jim Crawford
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Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)  We must be able to responsibly advise our clients.

Jul 02, 2008 08:44 AM #21
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Gene Wunderlich - Selling Southwest California Homes / Temecula & Murrieta (Coldwell Banker Residential Brokerage)  So many persons believe there is no skill needed to buy a home, brother are they dead wrong.

Jul 02, 2008 08:46 AM #22
Rainmaker
492,384
AJ Heidmann ~ CRS
McEnearney Associates, Inc. - Alexandria, VA
YOUR Alexandria & Arlington, VA Real Estate Expert

We don't have much of that around here in the close-in DC area, but I wouldn't touch a home in one of those for anything.  Jim, you bring up a good point about the time someone might have to hold a home within a poly farm just to break even.

Jul 02, 2008 10:50 AM #23
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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AJ & Jodee Heidmann (Coldwell Banker Residential Brokerage)   There was one subdivision in the Roswell area that sat for over 10 years with only 1 home sold.  There were many others over the years where the builder / developer went bankrupt and the swimming pool and amenities went unfinished. THE HOA had many unsuccessful lawsuits, and the homeowners had to bear the brunt of the expenses for over 4 years.  It is difficult to pay for a swimming pool when there isn't one. These are real life scenarios that I write about, and I am writing from experience.

Jul 02, 2008 10:55 AM #24
Rainmaker
67,920
Denise Allen
Resh Realty Group - Chesapeake, VA
Realtor@ Chesapeake, Hampton Roads

I was going to buy in one of those farms back in 1986 but it scared me.  Today it is a thriving subdivision.

Jul 04, 2008 12:17 PM #25
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Denise Allen Realtor@ Chesapeake (GSH Real Estate)  Right now thre are a lot of them!  I get a lot of inquiries from developers that cannot give them away right now.  At some point these will be great opportunities!

Jul 04, 2008 12:31 PM #26
Rainmaker
872,764
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

I'm not seeing any new subdivisions going in here.  Once all the new construction recycles, we might have a chance to start developing again.

Jul 04, 2008 01:51 PM #27
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Kay Van Kampen, Broker, Springfield Missouri Real Estate (RE/MAX Solutions)  Afew new ones are still coming up uout of the ground here.  I am at a loss since there are no contracts written!  Beyond scary here!

Jul 04, 2008 03:06 PM #28
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