Where have all the developers gone?

By
Commercial Real Estate Agent

With financing hitting one of it's hardest times smaller builders have found themselves over leveraged and holding too many properties.  Some have turned these into rental properties, some have given up and are losing the half completed homes to the bank and yet others are buying all the homes they can.

Where did the big guys go?  Half completed developments surround us, final plat approvals suddenly are taking longer than expected.  Those on short plat schedules are dragging their feet so they aren't forced to close.  So what's the story.

The real story is this.......timing.  Why would you close now or in the near future when financing is tougher than usual?  Why would you close now just to flood the market with more lots?

Most developers are holding tight so that they can get the original owners to carry the cost of holding the property through the hard times.  Can you blame them?  The overwhelming inventory is slowly going to be taken and they will be seeing better times......or so they believe.

What do you think?

 

On to the other item I mentioned - the developers who are buying.  They are seeing incredible deals on short sales as banks are unwilling to take over half completed projects and know they can't sell these to consumers due to financing issues.  Developers are buying at 50% - 60% of value, finishing the product and relaying some of the savings on to home owners.

Crazy market, great times and the time to make a deal.....oh and if you know of someone that fits these scenarios let me know, I may have a solution for you!!!

Comments (5)

Anne Hensel
South Beaches Real Estate Professionals - Saint Petersburg, FL
Realtor - Broker - St. Pete Beach, Treasure Island

Yes, Ryan, you are so right, it is all about timing. Some of them will disappear forever other will come back bigger them  ever

Anne

 

Jul 08, 2008 09:46 AM
Veronica DeCarolis
Weidel Realtors - Flemington, NJ

In our area Toll Brothers is very big.  They are slowing as well but have done some cutting back and extending out their finish dates.  We're all waiting for buyers to wake up to what a good position they hold. What you describe is typical of a recession market. (Yes I did use the r word.) Veronica

Jul 08, 2008 10:02 AM
James Wexler
wexzilla.com - Scottsdale, AZ

we are seeing developers stopped dead in the tracks unable to get plans approved with higher standards by zoning and planning and then if they can get past that, then there is no builder loans - the good ones will be there after the dust settles

Aug 13, 2008 05:19 PM
James Wexler
wexzilla.com - Scottsdale, AZ

I meant to add that developers are being stonewalled not only by city zoning. more severly by lenders. there is no cheap or easy money out there

Aug 27, 2008 05:08 PM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

In my building a homebuilder and a real estate company went under. I'll bet they owe thousands to the banks. The carnage even up here is worse than it's been reported. Every bank has bad loans on their books and there are no new developments being built. Everything is at a standstill. I'm not sure things will pick up until next Spring or Summer at the earliest.

Aug 31, 2008 01:53 PM

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