Tuesday, October 30, 2007

NAR Statistics on Empt Homes in America - Vacancy Rate - Homebuilders Greed

17.9 million empty homes that nobody needed. 17.9 million empty homes that won't sell. 17.9 million empty homes that stand as a testament to American greed, largess and folly. 17.9 million empty homes for bitter renters to choose from. And 17.9 million reasons why this housing crash will be the biggest in US history.The Census Bureau report also found that a record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.The figure is a 7.8 percent gain from a year ago, when 16.6 million properties were vacant, the Census Bureau said. About 2.07 million empty homes were for sale, compared with 1.94 million a year earlier, the report said. With inventories of unsold homes piling up near record levels, housing prices will have to fall further, economists say.

Nostradomus said Orlando Housing Bubble is going to burst

Wow - This is so Great- Article from a blog in on May 19th 2005. This guy is my new hero. He saw the Orlando Housing Market crash a long time ago. Great article...it was a bit before the Orlando housing market crashes, and everyone saw it coming...but still they head it dead on...when the investors pulled out (in Orlando and everywhere) the issues started.

The Orlando Sentinel tells us that the RE market may be coming to a head. "'It's insane,' said Gary Balanoff, broker-owner of Re/Max Select. 'Where does it end? I don't know.' The 21-year industry veteran said he has never seen such price escalation."

"There was a sign that change could be coming, with April sales throughout the region falling nearly 5 percent compared with April 2004. That was accompanied by a 5 percent increase in the inventory of available homes."

"Barbara Vance said she is dealing with more investors than ever before, with many buyers quickly becoming sellers."This is a quote for the ages. "If there is a slowdown, Brenda Rogers of the Lake County Association of Realtors wouldn't mind: 'I kind of wish we would. We've been so busy.'"

First Home Builders of Fort Myers Lays Off 200

Fort Myers-based First Home Builders announced Friday that it will lay off about 200 people across all sectors of the company effective Dec. 28.

“This is a painful action, but a necessary one to right-size the company,” said Tim Graney, vice-president of finance. “We are now positioned to operate more efficiently at a lower volume than we have enjoyed in the past few years.”

Despite the layoffs, First Home Builders will continue targeting first-time buyers for the sale and construction of new homes, according to a company press release.
Company spokesman Ray Casas said the layoffs are a reflection of a sluggish Southwest Florida real-estate market.

“The conditions are what they are, and this action had to be taken to right-size the company,” Casas said, adding that recalls remain a possibility in the future. “Obviously market conditions could change.”

Bill Berry, owner of WB Home Builders in Lehigh Acres, wasn’t surprised by First Home Builder’s announcement.

“The market is down for most builders, and First Home Builders built up so quickly that when the market crashed, I don’t think they were ready for that,” Berry said. “Right now, it’s a buyer’s market, and instead of building, people are snatching up foreclosures because they can buy them $20,000 to $30,000 less than what it costs to build.”

Sluggish market or not, Berry believes business could pick up quickly in Lee County.
“Lee County is such a fast-paced market that I think the market could correct itself pretty fast — stabilize and become normal in anywhere from eight months to two years,” he said.
Though operating on a much smaller scale than First Home Builders, Berry said he also recently had to let two employees go.

“I had to let a trade guy and an office lady go, mainly because work is so slow and there’s no work to give out right now,” he said.

That said, the slow building market hasn’t yet cast its shadow over the world of home-improvement sales, according to John Sandford, manager of the Lowe’s at 14960 S. Tamiami Trail in Fort Myers.

“We’re pretty happy with the way things are going now,” Sandford said. “There have been brisk sales in the remodeling portion of the business, with kitchen upgrades and upgrades of people’s current housing. Overall, the real-estate and building industry is down, but we’re happy with our business, happy with the average homeowner continuing to improve their home.”

Saturday, October 27, 2007

Homesales Nosedive in Las Vegas - Pulte and KB drop prices again

Looks like the once hot Las Vegas Housing market is declining as fast as the rest of the nation. Many builders were depending on the market, but now it looks like either Pulte or KB Home is going to pull out of Las Vegas. Below is an article from Brian Wargo - In Business Las Vegas

The number of new-home and existing-home sales in September fell to the lowest monthly total this decade as home prices continued to tumble, according to statistics released Tuesday by a Las Vegas research firm.

The release of the data by SalesTraq comes as a local housing analyst said Wall Street investment bankers are concerned that at least one and maybe other major public builders will pull out of the Las Vegas housing market.

Steve Bottfeld, executive vice president of Marketing Solutions, declined to name the builder analysts named, but said they are concerned because Las Vegas has been so profitable for builders.

The worry centers on the rising cost of land and a move toward mixed-use developments and mid-rises, Bottfeld said. A number of builders have sold their land holdings and aren't interested in urban villages, he said.

Builders didn't show much confidence in the Las Vegas housing market in September when they took out 591 housing permits. That's the lowest monthly total this decade, said SalesTraq's Larry Murphy.

"We have not reached the bottom of this market in either new homes or existing homes," Murphy said. "The short-term outlook for this market is not good. It will take another 12 to 18 months before we will see any significant improvement in my opinion."

New-home sales plummeted to 1,328 in September, down 52 percent from September 2006, when there were 2,565. The median prices fetched for new-home sales in September was $308,055, 13 percent below the market's peak in April 2006 when the price was $355,435.
As for existing-home sales, there were 1,466 in September, down 50 percent from September 2006 when there were 2,946. Of those homes that sold, the median price of $263,075 is nearly $27,000 or 9.2 percent below its peak of $290,000 in October 2006. That's the lowest median price since it was $263,000 in March 2005.

Some analysts have predicted existing-home prices could fall 20 to 30 percent from their peak as inventory remains at record levels with a 19-month supply.

The fall in prices comes as a credit crunch makes it harder for buyers to qualify for loans. Analysts said that's an even bigger problem in Las Vegas where there are a lot of first-time and second-time homebuyers. In addition, casino workers who in the past have relied on stated income loans aren't qualifying today.

The latest report is good news for buyers waiting for prices to drop even more before they jump in the market and bad news for those hoping to cash in on the appreciation of their homes from price increases 2004 and 2005.

Builders continue to offer substantial incentives ranging from bonus commissions to real estate agents to as much as $100,000 in free upgrades to buyers, Murphy said. Earlier this month, Lennar Homes dropped prices 25 percent in about 30 of its new-home subdivisions, Pulte had a sale advertising a 15 percent cut in prices while Astoria Homes had price cuts of $70,000 or more. KB Home has had major price reductions twice this year already, he said.

Despite the prices and sales continuing to nosedive, Bottfeld remains optimistic about the future of the housing market and suggested September may have been the bottom. One reason he cites is that the inventory of existing homes on the market in September at 27,417 virtually matched the August total.

"As far as a correction goes, what we have had is pretty mild," Bottfeld said. "If we are not at the bottom, then we will have one more bad month before we see it turn around. I am willing to bet that prices will go up at the end of this year, not down."

Despite his concern about the market over the next 12 to 18 months, Murphy said the housing market future remains bright with resort development along the Strip that will generate more jobs and need for housing.

As for a major builder or two pulling out of the market, Monica Caruso, spokeswoman with the Southern Nevada Home Builders Association, said she is not aware of any such plans, but she noted that builders could do that without an announcement. The number of builders in the market was 97 in 2005 and fell to 77 in 2006 and is expected to fall even further through consolidations, closings or pulling out of the market, Caruso said.

"It is a trend we have been watching and we believe with the decline in sales activity compared to 2005 and 2006, that many homebuilders are operating on reserve funds and that can only go on for so long," Caruso said. "Many if not all of the home builders have had layoffs and cut back expenses to make it through this period."

Many builders are counting on resort development, including developers like CityCenter, to generate more jobs and with it a greater demand for housing, Caruso said.

"We know there are many homebuilders who are holding out because of the opening of two major resort properties," Caruso said. "They feel it is going to create instant demand because of the thousands of new jobs created. People must live somewhere."

Is Now the Time to Invest in Homebuilders Stock? Um, no...

National home builders are suffering from lower stock prices right now and some investors might think it's time to buy buy buy.

Forget it. While Centex, KB Homes and Lennar Corp., all of which have developments in Polk County, are suffering, now might not be the time to invest."Any time you start sector betting, you're concentrating your risk in one area," said Laura Hawley, a financial planner and vice president of Allen & Company in Lakeland.
On a national level, the home market isn't showing any signs of rebounding.Just 5.04 million homes were sold in September, down 19.1 percent from 6.23 million in September 2006.
This past week's home sales reports, released by the National Association of Realtors on Wednesday, sent builder stock prices tumbling.

Centex shares dropped 37 cents to $24.27. DR Horton Inc., one of the nation's largest builders, fell 49 cents, or 3.9 percent, to $12.22, while Lennar Corp. slid 37 cents to $22.07. Beazer Homes USA Inc. had shares decline 11 cents to $9.69."It is really just buyer beware," she said.Hawley likened the scenario to the dot com market bust in 2000."A lot of those companies that were blue chip stocks never recovered," she said. "It doesn't mean these companies are going to come roaring back like they were."

And when it comes to building new homes, it doesn't get much better. The Commerce Department reported Wednesday that construction of new homes fell 10.2 percent in September to a seasonally adjusted annual rate of 1.191 million units. The decline was more than double the 4.2 percent drop that analysts had been expecting and it pushed activity down to the lowest level since March 1993.

"I think the real estate market in general isn't done," Hawley said. "I think we still have a lot of weakness there."But Polk County, Florida is some ahead of the building bust curve. Contractors across the county pulled 271 new home permits last month, which is an 8.1 percent decline from 295 permits in September 2006. And while it is still the 19th consecutive month permit totals have declined, the lower decrease is encouraging. For more than a year, builders have sought some relief to the sluggish housing market.

Thursday, October 25, 2007

Neumann Homes of (Chicago, Denver, Detroit, Wisconsin) Files Bankruptcy

Neumann Homes Inc., a large homebuilder in Chicago, Denver, Detroit and Wisconsin, is filing for Chapter 11 bankruptcy protection because of the slump in housing markets.

The company said late Monday that it had been unable to secure adequate funding to operate its business and had closed its sales, production and customer service offices. It said it has laid off most of its employees, but did not give a number.

Chief Executive Kenneth Neumann blamed the situation on a "significant downturn" in housing markets in Detroit, Chicago and Denver.

"Even after the significant help we have received from our lenders this year, the company can no longer weather this storm," he said in a statement.

Neumann Homes expanded to the Detroit area in 2005 by buying Tadian Homes, an acquisition that made it the 35th-largest U.S. homebuilder at the time. But that market has been hard-hit since by auto industry layoffs, and the company said the move has cost it more than $60 million.
This year, the housing market nationwide has been battered by a steep drop-off in both price and demand.

Steven Hovany, president of the consulting firm Strategy Planning Associates Inc., said Neumann fell victim to an overaggressive and mistimed expansion into new markets. "As a result, they've got a lot of projects and few sales," he said.
Neumann has 15 active developments in the Chicago area, mostly in distant suburbs such as Antioch, Grayslake and Oswego.

Monday, October 22, 2007

State of the Orlando Housing Market - Real Opportunity Central FL is SICKENING

This is friggin sickening. Seriously. This is like some Nazi Germany style proganda. Let me explain: The Orlando Homebuilders Association (HBA) has developed new marketing campaign (TV and Internet) to sell more homes in a down market.

This Site RealOpportunityCfl.com is aimed at getting central florida homebuyers off the fence. It is a million dollar marketing campaign to, and I quote "serve only one interest - that of the homebuyer,". WHAT A LOAD OF BS. I mean seriously....don't you think if that was the interest it would be a consortium of Orlando or Central Florida homebuyers and not the Homebuilders Assosiation of Central Florida. Consider this blatant scare tactic by the Orlando HBA - "As a first-time buyer, should I wait until prices go lower to buy a home? No. If you continue to wait, you may never be able to afford to get into the housing market."

I am still involved with the homebuilding industry in Centrla Florida....as a marketer...and this is enough to make me want to puke. Yes, it is a down market and builders need to sell homes to survive. Layoffs are plenty. The Orlando HBA is trying to sell homes, but that statement is one of the biggest, whitest, blatant lies I have seen in my marketing career. The orlando real estate and homebuilding market is one of the 5 worst markets in the nation right now. Too much inventory, overpriced homes, etc. Same old story. This site is aimed to take advantage of PEOPLE and put money in the pockets of Orlando Homebuilders. Now, hey...if you need a home and the price is right, it very well MAY be a good time to buy. The builders are dopping their prices (and pants) to make sales, yet the safe bet is the market drops for at LEAST anoter year...and the builders know and are planning on this.

Maybe the Orlando Homebuilding Association think that they can help nudge the market in the right direction. Seems a bit lofty to me, but I respect the concept. The execution however resluts in just doing the same thing they have done for the past 5 years in a hot market....screwing nervous, undereducated homebuyers. More greed and self preservation.
I have no agenda other than to report on the current state of the homebuilding market. The Orlando market is very clearly in shambles....When I cool down I will edit this post to include the stats...
Anyways, more to come on this.

Stats on the Orlando Housing and Real Estate Market for August 2007:

The latest real estate market numbers released today by the Orlando Regional Realtor Association reveal a rising inventory and mortgage rates alongside declining values and number of sales in Central Florida. The inventory as of the end of August stands at 26,313 homes on the market and average mortgage rates have jumped 40 basis points in the past 12 months to 6.6% vs. 6.2% 12 months ago. The median price has dropped from $250,000 12 months ago to $245,000 at the end of August. The more alarming number is that the number of sales sales have dropped more than 40% than a year ago. August 2006 recorded 2,249 sales while August 2007 sales were a mere 1,343. The inventory based on sales in the Orlando market is 19 months of supply.

Friday, October 19, 2007

K. Hovnanian Layoff Email From CEO - More Homebuilding Industry Layoffs

I found this on paper-money. It is an email from the K. Hovnanian CEO to his employees written earlier this month. (note...it was actually from last year....but um, who cares. K Hovnaian is really a trendsetter. Times are even worse now...need me to grab another memo for ya "strong"? Unfortunately, other homebuilding CEO's are preparing to write the same letters. So many in the industry have been layed off due to the greed of big builders. Private and public homebuilders alike continue to layoff staff at an alarming rate. I think at this rate K-Fed's rap career is more promising than K-Hov's future.

MEMORANDUM TO: All Associates
FROM: Ara K. Hovnanian
DATE: October 3, 2006

Fellow Associates,
A few months ago I wrote to you about the changing market conditions in our industry and our concerns about how long the downturn in homebuilding may last. Since that time, the market has slowed further still, representing one of the steepest declines in new home sales in our memory. Most of our markets have been affected, some severely. At this point, we are preparing for a long period of slower sales, at least through 2007 and perhaps beyond.

What does this mean for you and for our Company? These new market conditions have affected us in many ways and will continue to affect us in the months ahead. In the area of land acquisition we have been re-evaluating our current land positions and the contracts for new land in the light of these new conditions (Land Folks are half the reason for the new decline...although ultimately the builder executives approved the bad deals). Many of those contracts no longer make good financial sense when you factor in lower prices and a slower sales pace. In cases where we have been unable to renegotiate these contracts with more favorable terms, we are canceling them, at times forfeiting our deposit monies.

We continue to work on ways to reduce costs. We have also had to make adjustments to our pricing in order to make sales, either through added features, free options, waived premiums or outright base price reductions. In a market where our competitors are making dramatic pricing concessions, we must make similar adjustments in order to remain competitive. Obviously, this has a significant impact on our profits on those homes that we sell at a discount. The most difficult adjustment we have had to make to the changing market is in the area of staffing.

In many locations, including corporate headquarters, we have been forced to face the fact that we no longer have enough work for all of our Associates. We were hoping that normal attrition and a reduction in new hires would prevent us from needing to take further action. Those steps helped, but did not solve the problem of having too little work for our entire team. As a result, we have had to make staff reductions.

We consider this action to be a last resort, but business realities demand action in order for our Company to remain healthy and to maximize our performance in a difficult market environment.

Thursday, October 18, 2007

Homebuilder Layoffs - St. Joe Company Lays Off 80% of Its Staff

The St. Joe Company, Florida’s largest private landowner, which has been afflicted by the worst housing slump in 16 years, plans to eliminate more than 75 percent of its work force, sell about 100,000 acres of land and scrap its dividend.

The retrenchment includes cutting 760 jobs, selling 190 homes and about 1,200 developed home sites, St. Joe (formerly Arvida), based in Jacksonville, Fla., said yesterday. This quarter’s earnings will be reduced by a $30 million charge. The company will also have $7 million in severance costs this year and next.

St. Joe is shifting from building homes in Florida, where sales plummeted 41 percent in the second quarter, according to the National Association of Realtors, to developing planned communities.

“This is not a fire sale,” the chief executive, Peter S. Rummell, said yesterday in a conference call. “We are not dumping stuff on the market and we are not going to make stupid decisions, but there are things that we believe have reached their height in pricing. I firmly believe that we would be doing this whether the market was good or bad.”
St. Joe shares fell 4 cents, to $34.11.

This is another example of a Florida builder that made huge mistakes. This company owns more land than the Florida govenment...miles and miles of beach. The locals in Florida's Panhandle, or as JOE wants to call it Florida's Great Northwest hates this company. They are developing pristine plats of preserve quality land. I think they are actually a pretty "green" builder. Anyways, this one is stunning...I don't care what Peter Rummell says. Laying off 80% of your staff IS a fire sale. I am stunned they didn't at least do it in phases where they didn't need to announce it.

Uh Oh Beazer Owes Money, 68% Cancellation Rate, More..

Highlights Below.
Full article here.

Beazer Homes USA on Monday offered creditors cash for backing off demands that the company immediately repay $1.5 billion in debt.

Beazer already is battling bondholders in court over the issue, where it seeks to prevent trustees from demanding the money because the company has missed deadlines for filing required Securities and Exchange Commission reports.

Now the company wants creditors to adopt a covenant that obliges Beazer after May 15, 2008, to file reports with the SEC and deliver those reports to trustees. The covenant also would require Beazer to pay an additional 0.5 percent interest per year "if Beazer fails to comply with such obligations on a timely basis." Beazer, which offered to pay a "consent fee" for every $1,000 in principal outstanding, repeated its belief that it's not in default.
"If they thought they'd win (in court), why are they doing this?" said credit analyst Vicki Bryan of Gimmie Credit. "They blinked."

She predicted Beazer will strike a deal, similar to the arrangement KB Home struck with bondholders after the homebuilder was late filing an earnings report last year. The company delayed its filing to complete an internal review of its historical stock option grants and related accounting.

In a research note Monday, Bryan said Beazer's "most pressing issue is its dramatically poor performance in this weak homebuilding cycle, which is worsening by comparison to other builders that compete for the same buyer."

(Hey Look.....another big builder owned mortgage/loan scandal. Go figure.)
Last week, Beazer said it found evidence its employees violated unspecified federal housing regulations, "particularly in relation" to down-payment assistance programs for Federal Housing Administration insured loans dating to at least 2000.
Beazer said it would try to reach a settlement with regulators for between $8 million and $15 million.

Beazer also reported some financial results for the quarter ending Sept. 30. Home closings dropped 39 percent from the same time last year. New home orders declined 52 percent, "driven by an unusually high cancellation rate" of 68 percent, the company reported.
The revelations were part of an interim internal investigation, launched in April after the Observer published a series that questioned Beazer's business practices and its high foreclosure rate in the Charlotte area.

Beazer's mortgage subsidiary was among the most active in the Federal Housing Administration home loan program in the Charlotte area. Many foreclosures involved loans where an arranged gift from a charity or nonprofit was used to cover a borrower's down payment. The Observer found that Beazer incorporated the cost of the down payment into the price of some homes in Southern Chase, a Concord subdivision.

Lennar is the Bomb...uhh, err I mean they are building on bombs

CF news 13 reports:

Work is starting Tuesday (October 07) morning to dig up dozens of yards in Orange County, Florida to search for old bombs.

On Monday, crews for Lennar Homes spent the day marking the neighborhood that sits on what used to be the World War II era Pine Castle Jeep Range.

All spots marked during the survey will be dug up. More than 50 homes could be affected.
So far, several old live munitions have been found nearby and close to Odyssey Middle School.
The work to find more bombs could take several weeks.

Lennar Homes told News 13 that they will dig up anything made of metal. The company said they are doing it to bring peace of mind to the people who live in the community.

They said it will take about two weeks to dig around 21 homes in the Lee Vista area.
Some people will have to leave the area while the work is going on.
Since July, the Army Corps of Engineers have been looking for bombs after the initial discovery near the school.

Previous article:
A home builder in Orange County (lennar) is searching under homes near Odyssey Middle School for unexploded bombs.
In July, two live bombs were found near Odyssey Middle School and a planned high-tech corridor, prompting a study by the Army Corps of Engineers. The school had been build on top of a former bombing range.
The home builder, Lennar Homes, will be using a machine to go through the Lee Vista Square and Warwick neighborhoods to make sure that there are no old bombs underneath the homes.
The machines are used to detect unexploded bombs that could be underground.
Lennar Homes said it was caught off guard by the news that the subdivision sits on a former Army bombing range. Now, the company is assuring residents they are trying to do everything they can to keep them safe.

What does this mean? In my opinion Lennar (like all of the big builders) rushed into another land deal. Obviously they did not budget to have to dig through all of the land to look for bombs. What a PR nightmare...and in this market. I am glad that someone caught this homebuilders mistake before either a worker or child was harmed. Whooopsie!

US Housing Crash Continues - Why It is a Terrible Time to Buy

US Housing Crash Continues It's A Terrible Time To Buy (a terrific post from patrick.net, echoes my last post)

Why? Prices still disconnected from fundamentals. House prices are still far beyond any historically known relationship to rents or salaries. In extreme bubble areas like California, yearly rents are 3% of purchase price. Mortgage rates are 6.5%, so it costs more than twice as much to borrow money to buy a house than it does simply to rent an equivalent house. Worse, total owner costs including taxes, maintenance, and insurance are about 9%, which is three times the cost of renting. Salaries cannot cover mortgages and loans are harder to get nationally. Anyone who buys now will suffer losses immediately, and for the next several years at least.

Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and senators are talking about taking your money to pay for your neighbor's McMansion.

Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the risk onto Fannie Mae (ultimately taxpayers) or onto buyers of mortgage backed securities. Now that it has become clear that a trillion dollars in mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage backed securities. This means that the money available for mortgages is falling, and house prices will keep falling, probably for 5 years or more. This is not just a subprime problem. All mortgages will be harder to get. A return to traditional lending standards means a return to traditional prices, which are far below current prices.

Interest rates increases. When rates go from 5% to 7%, that's a 40% increase in the amount of interest a buyer has to pay. House prices must drop proportionately to compensate. The housing bust still has a very long way to go. For example, if interest rates are 5%, then $1000 per month ($12,000 per year) pays for an interest-only loan of $240,000. If interest rates rise to 7%, then that same $1000 per month pays for an interest-only loan of only $171,428. Even if the Fed does not raise rates any more, all those adjustable mortgages will go up anyway, because they will adjust upward from the low initial rate to the current rate.

Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world. It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6%. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.

Shortage of first-time buyers. The percentage of San Francisco Bay Area households who could afford a median-price house in the region plunged from 20 percent in July 2003 to under 10 percent in 2006.

Surplus of speculators. Nationally, 25% of houses bought in 2005 were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that "Investor-driven price appreciation looms over some housing markets."

Fraud. It has become common for speculators take out a loan for up to 50% more than the price of the house he intends to buy. The appraiser goes along with the inflated price, or he does not ever get called back to do another appraisal. The speculator then pays the seller his asking price (much less than the loan amount), and uses the extra money to make mortgage payments on the unreasonably large mortgage until he can find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn't work at all, unless the speculator simply skips town with the extra money.

Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 61. The only money they have is equity in a house, so they must sell.

Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse. The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

How did the Homebuilding Market get so bad?

Just some thoughts on the current decline in the homebuilding market. Why is the market collapsing?

  • When will it rebound. As far as the why, and how did we get here...In my opinion....GREED.
  • Buiding too many houses with no buyers in a crappy market - GREEDY Homebuilders
  • Financing unqualified home buyers to sell them a home - GREEDY Homebuilders
  • Poor Planning and getting the money while the market is hot - GREEDY Home builders
  • Buying ANY land they could get their hands on and making bad land deals - GREEDY Homebuilders
  • Saturated Markets- Greedy Homebuilders
  • No one can qualify for new home loans because of aforementioned fiancing games - Greedy Home builders

Anyone care to add more?

New Home Sales Hit 7 Year Low - Homebuilders Suffer a Down Market

Another article highlighting the current homebuilding market. New Homebuilders are sucking win and paying for their greed, and poor planning. Homebuyers and employees of these builders continue to suffer.

NEW YORK (CNNMoney.com) -- The mortgage bomb hit the demand for new homes even harder than expected in August, leaving the nation's builders with their weakest level of sales since the summer of 2000, when the nation was struggling with a stock market collapse, rising interest rates and a looming recession.

And the government's latest snapshot of the battered housing market, released Thursday, may actually be understating the problem: It does not account for the rising cancellation rates or sales inducements that builders have reported in recent months. New home sales hit a 7-year low in August in the face of problems in the mortgage market.

According to the Census Bureau, new homes sold at an annual pace of 795,000 in August, down 8 percent from the revised 867,000 sales pace in July.It was the slowest pace of sales since June 2000, as legions of buyers had trouble finding mortgages or selling their existing homes. Economists surveyed by Briefing.com had forecast that sales would fall to a pace of 825,000.

The report also showed the median price of a new home fell 7.4 percent from year earlier levels to $225,700 in the month, as prices were pressured by both the problems in mortgage finance and the excess supply of homes on the market. The inventory of new homes on the market rose to an 8.2 month supply, as the glut of completed homes without a buyer was near a record high, with 180,000 completed homes listed for sale, just off the record high of 182,000 set in May of this year. The July report wasn't the only month revised lower by the Census Bureau; it also dropped its sales estimates for May and June, leaving sales 34,000 below the previous estimates.

The decline in sales came despite a pickup in sales in the Northeast and Midwest compared to July. But the South, which accounts for nearly half of the nation's new home sales, saw a nearly 15 percent drop from July levels, while sales in the West declined more than 20 percent. Sales in each of the four regions were off more than 10 percent from year-earlier levels, and nationwide the pace of sales is down 21.2 percent from a year ago.

This is just the latest sign of trouble for the housing market. On Tuesday, a report from the National Association of Realtors showed the pace of existing home sales dropped in August for the sixth straight month to their lowest level in five years. And the new home sales report likely did a better job capturing the turmoil in the real estate market in August, as it is based on contracts for new homes signed in the month. The existing home sales figures are based on when a deal is closed, typically a month or two after the contract is signed.

The new home sales report, besides serving as a leading indicator of the overall housing market, is closely followed because of the importance of construction to the overall economy. The home building boom helped support the nation's economic and employment growth during 2003 to 2005. But economists are growing increasingly concerned that the current weakness could become a large enough drag on the economy to help tip the nation into recession. The latest report on gross domestic product, also released Thursday, shows investment in housing subtracted 0.6 percentage points from the nation's overall growth in the second quarter. Still, as weak as the new home sales report is, experts caution it could actually be masking other signs of weakness.

Builders have reported significantly higher cancellation rates for buyers who have signed a contract but then back out of the sale. So demand could be weaker than the report suggests. Also about three quarters of builders surveyed by their trade group report offering incentives, such as paying for closing costs or offering additional features on a new home for free, in order to maintain demand.

So the drop in prices could actually be more severe than the report indicates. The nation's major home builders have been hammered by the downturn in both home sales and prices in the last year. On Thursday, KB Home, the nation's No. 5 home builder, reported a loss in its most recent quarter, compared to a solid profit a year ago, as the company warned it expects conditions to worsen through 2008. Lenar, the nation's No. 1 home builder by revenue, posted a bigger than expected loss Tuesday. In addition, No. 2 homebuilder D.R. Horton and No. 3 Centex both reported losses far bigger than Wall Street had expected, while No. 4 Pulte Homes and No. 6 Hovanian Enterprises both have reported losses for the last two quarters and analysts project losses for at least the next year.

Builders and Their Own Mortgage Companies Fueled Housing Collapse

What is a homebuilder's #1 marketing tool in this new, soft, housing market? Enticing you with mortgages and deals that ONLY apply when you finance through the Mortgage company that they own. Just about all of the big builders own their own mortgage companies. It is what got them in trouble in the first place. It was in their best (SHORT-SIGHTED) interest to make sure potential homebuyers qualified for a loan on the houses they were selling. Henceforth overstating income, falsifying loan documents etc. Hundreds have been jailed for it.

Now, they are still using their mortgage companies. This time to offer sweet-looking deals, still getting underqualified buyers into homes with loans that will balloon in just a short year or two. It is a huge gamble as a new homebuyer. Be cautious. Do your homework.

Ruth Simon, Wall Street Journal Thinking of buying a new home in this softer market? Chances are your builder is going to try to sell you a mortgage. Builders have long encouraged their customers to use their mortgage affiliate for financing, and not just to make a little extra money. It also gives them control of the transaction, making it less likely that a mortgage snafu will create problems at closing. Now, as sales slow and cancellations rise, builders are increasingly rolling out special deals that may be tied to using their affiliated lender.

But you may well be able to find a better deal on your own. Builders' mortgage offers "clearly are worse in all the cases I've seen," says Jack Guttentag, professor emeritus at the University of Pennsylvania's Wharton School and founder of the mortgage-advice Web site www.mtgprofessor.com.
When Randy Gowler, a Olathe, Kan., architect, wanted to buy a new four-bedroom home this year, the builder offered to pick up the first $8,500 in mortgage payments.

The catch: Gowler had to use the builder's affiliated lender and pay the full $287,000 asking price. Gowler crunched the numbers and turned down the deal. Instead, he went with an outside lender that offered a lower interest rate and paid $274,000.Unlike Gowler, most home buyers stick with the builder's lender. Pulte Homes Inc. says Pulte Mortgage provides financing for 90 percent of its buyers who need a mortgage. Centex Mortgage finances 80 percent of Centex Corp. customers. Most builders either have a mortgage affiliate or preferred lenders they work with.

Builders say their rates are competitive and that their mortgage affiliates give them more control over the sale. Indeed, getting a loan through your builder can be a plus if construction is delayed, says Greg McBride, a senior financial analyst with Bankrate.com, because a builder's mortgage unit is more likely to be flexible if there are construction delays. As the housing market has cooled, many builders have sweetened the pot with special deals. A September survey conducted by the National Association of Home Builders found sharp increases from last year in the number of builders offering to pay closing costs and other fees and in those reducing home prices.

In many cases, home buyers must use the builder's financing arm to qualify for these offers. That's particularly true if the incentive is mortgage-related, such as when the builder pays closing costs or picks up several months of mortgage payments. Buyers may also be required to use the builder's mortgage unit to qualify for a reduced purchase price, builder upgrades or other concessions. Some competitors say that these requirements put buyers at a disadvantage." They prevent consumers from shopping to see if there's a better deal out there," says Marc Savitt, vice president of the National Association of Mortgage Brokers. The savings from incentive programs are often illusory, he says, because the home buyer is charged a higher mortgage rate or more in fees and closing costs by the builder's mortgage affiliate.

The builders disagree. "This is really about special interests trying to limit competition - and increase their profits - by legislating home builders out of the mortgage business," the National Association of Home Builders said in a statement. Federal rules prohibit builders from requiring that home buyers use their mortgage affiliates. The rules also require that any discounts offered to buyers who use these affiliates must be true discounts and not made up through higher charges elsewhere.

The Department of Housing and Urban Development says it is getting more complaints not only from mortgage brokers, but also from consumers. One builder canceled a purchase contract and refused to return an $11,845 down payment after the buyer decided to use an outside lender. After HUD intervened, the builder's mortgage company agreed to buy down the rate to make the loan more competitive. Another builder agreed to waive $5,360 in mortgage-origination fees that a buyer was being required to pay in order to qualify for $13,450 in incentives.

To make sure you're getting a good deal, ask the builder not only for the mortgage rate, but also for details on closing costs, points, any fees that will be paid to the lender or third parties, and the terms of the loan. Prof. Guttentag advises comparing that offer to a quote for the same mortgage obtained on the same day from an online lender. He also suggests shopping for financing at the same time you look at houses. Whether the builder's deal is worth taking can also depend on how long you plan to stay put.

A slightly higher mortgage rate may not be a problem if you plan to move in a few years, but it could wipe out the benefits of any incentives if you plan to stay in your home longer. You should also check what comparable homes are selling for to determine whether the builder is offering a real discount. It can pay to negotiate. When Scott Lazaroff, an engineer, bought a new home in Lyons, Colo., in September, the builder offered to knock an extra $15,000 off the price if Mr. Lazaroff used its affiliated lender. He decided to use his own lender, but still convinced the builder to reduce the price by $10,000. Dan Gracey, another Colorado home buyer, said his builder came back with a lower mortgage rate after he "pushed back" on its original offer, which was higher than the competition.

Mortgage Brokers Being Jailed for Fraud and Overstating Income

Two sentenced in loan scheme Vance salesmen falsified applications, Andrea Weigl, News Observer Two Vance County mobile home salesmen were sentenced Wednesday to federal prison time for a $19 million mortgage fraud scheme.

Richard D. Meador and Donald Scott Carroll were both employees of Donald Wayne Gupton, a Vance County businessman who operated several companies that state and federal agents have been investigating since at least 2003.

Prosecutors have said Gupton and his employees used a half dozen illegal means to falsify loan applications so buyers with bad credit could get loans. Ultimately, the borrowers couldn't afford the mortgages, and the banks foreclosed on the homes. Gupton, a Henderson businessman, has already pleaded guilty to federal charges and is scheduled to be sentenced next month. Gupton owned Dynasty Homes of Henderson, Superior House Center and Creative Real Estate and Manufacturing Housing Sales Center.

Meador, a manager at one of Gupton's companies, was sentenced Wednesday at the federal courthouse in New Bern to four years and five months in prison, followed by three years of probation. He was ordered to pay $1.2 million in restitution. Carroll, also a manager, was sentenced to 2 1/2 years in prison and three years of probation, and ordered to pay $1.4 million in restitution. Meador's attorney, Lewis Thompson III, said the restitution has to be paid jointly by the defendants and Gupton's companies.

Prosecutors say the scheme's tactics involved using the same mobile home as a trade-in for nine different buyers and giving money to buyers to make it appear they had down payments when they did not. Gupton's employees also created fake letters from borrowers' relatives saying they had loaned money for down payments when they had not, prosecutors say.

Carroll has cooperated with investigators since 2004, according to court filings by his defense attorney, F. Hill Allen IV, and Assistant U.S. Attorney Banu Rangarajan, who both sought a lighter sentence for Carroll. Allen said the judge did not reduce Carroll's prison sentence. "Obviously, this is a sad moment for his family and Scott," Allen said. "We certainly respect the court's decision."

KB Homes Taking a Big Hit as Sales Slump

LOS ANGELES (AP) - KB Home , one of the nation's largest homebuilders, swung to a loss Thursday, citing a deep deterioration in the housing market and warning the sales slump will likely extend into next year.

KB's financial results were released the same day the Commerce Department reported new home sales in August fell 8.3 percent from the previous month to the lowest level in seven years. "We expect housing industry conditions to continue to worsen through the end of the year and into 2008," said Jeffrey Mezger, KB's president and chief executive officer. "Our third-quarter results reflect the seriously challenging market conditions that prevail for homebuilders across most of the nation," he said. Los Angeles-based KB Home reported a loss of $35.6 million, or 46 cents per share, for the quarter ended Aug. 31, compared with a profit of $153.2 million, or $1.90 per share, in the year-ago period.

The company also said it took pretax charges of $690.1 million and $107.9 million to write down the value of unsold inventory and joint-venture holdings. KB shares rose 62 cents, or 2.6 percent, to $24.71. The homebuilding sector has been struggling as many would-be buyers wait for prices to drop further or struggle to qualify for mortgages that now carry tighter standards. That has left more homes on the market, forcing builders to lower prices and squeezing their profit margins.

Chicago Homebuilding Market - Huge Downturn - Smaller Homebuilders May Go Out of Business

The local homebuilding industry’s freefall accelerated in the second quarter, as builders posted their biggest quarterly sales drop since the market peaked two years ago. Residential developers in the Chicago area sold 4,376 new homes in the quarter, a 37% drop from the year-earlier period and their poorest showing since 1994, according to Tracy Cross & Associates Inc. Conditions are especially grim in the suburbs, where sales fell nearly 41%, to 3,184 units — a level not seen since the recession of the early 1990s.

The market “hasn’t shown any sign of recovery at all,” says Tracy Cross, president of the Schaumburg-based real estate consulting firm. “It’s just a very lethargic market that isn’t reacting to anything.” Amid a downturn much deeper and longer than many predicted, suburban homebuilders have cut prices, slashed payrolls and reduced their land holdings. Kennedy Homes L.P. of South Barrington employs about 75 people today, down from a peak of 160 in 2005, says President William W. Kennedy. The firm is on track to sell 275 homes this year, compared with 350 last year and more than 700 in 2005. It’s conceivable that a few smaller, privately held homebuilders could go out of business before yearend, Mr. Cross predicts.

The slump so far has landed at least one homebuilder in Bankruptcy Court: Burnside Construction Co., a Downers Grove-based company that has built more than 28,000 homes since it was founded in 1911. In early May, Burnside filed a Chapter 7 petition in U.S. Bankruptcy Court in Chicago. “Projects didn’t go as anticipated. Nobody was buying,” says Kent Gaertner, the company’s attorney. “It’s as simple as that.” On a seasonally adjusted, annualized basis, sales totaled 16,378 units, down 36% from a year earlier and the lowest level since fourth-quarter 1994.

The slump began in late 2005 as rising prices and mortgage rates made homes increasingly unaffordable for buyers, many of whom opted to rent instead. Concerns about a housing bubble scared away speculators, curbing demand further. More recently, troubles in the subprime mortgage market have made it harder for buyers with marginal credit to finance home purchases. Although suburban builders are having their worst year since the early 1990s, the city market is in better shape. Developers sold 1,192 homes in the quarter, a 24% drop from second-quarter 2006, according to Tracy Cross. Still, on a seasonally adjusted annual basis, city sales are roughly equal to 2003 levels.

A growing glut of condominiums, however, could delay any recovery. Tracy Cross is tracking 172 active condo and townhome projects in the greater downtown area with a combined 7,814 unsold units. Mr. Cross estimates that two-thirds of the projects are under construction and will open up in the next 12 to 18 months. Unless demand picks up, some developers could get caught with unsold units, eating into their profit or even preventing them from paying off their construction loans. “It’s going to bring the strongest (developers) to the fore, and the weakest will really drop,” Mr. Cross says.

Ahh, Homebuilders were Flying High Just So Recently

This blog is geared to highlight current events in the homebuilding industry. It won't make the big homebuilders happy. That is not the point. It may make some people stiffed by the big homebuilders happy. That is not the point either. It is designed to highlight what many feel is a monumental dip in the new home starts, a very significant decline in profits and long-term viability of the nations biggest homebuilders and the housing markets. There are valuable lesson's to be learned regarding poor business decisions, economic trends and the value of long-term planning. Will the big homebuilders in the US rebound? Without question! Will they learn lessons? History shows probably not.

Wednesday, October 10, 2007

Lennar Homes Cuts Jobs, Posts Q3 Loss. Realtors Report Lennar Cuts Commissions to $10,000 Flat

In late septeermb, Miami-based Lennar Corp. reported a third-quarter loss of more than $510 million dollars. Lennar said it had cut its work force by 35 percent and warned it expected further job cuts.

The nation's second-largest homebuilder said on Sept. 25 that its results swung to a net loss of $513.9 million, or $3.25 a share, for the three months ending Aug. 31 from a profit of $206.7 million, or $1.30 a share, a year ago. Revenues from home sales fell 44% -- mostly on a 41% drop in the number of home deliveries and a 6% decline in the average sales price of homes sold. Lennar had to suck it up financially to move a lower number of houses. Gross margins fell to 14.0% from 19.5% a year ago due to a $10,100 hike in sales incentives to $46,000 per home, which was responsible for the lower average sales price.

And sagging home sales weren't the only nightmare for Lennar. The Miami-based company took an $847.5 million pretax impairment charge to write down the value of its assets. That included a $344.7 million loss on land sales, of which $242.5 million was for write-offs of deposits and pre-acquisition costs related to 15,000 home sites under options that Lennar decided not to buy.

This was the biggest writeoff Lennar has taken since the housing slump began and added to the $1.05 billion in write-offs the company has taken since 2006, Banc of America Securities said in a research note (BAS does investment banking with Lennar.)

New orders deteriorated from a 31% year-over-year decline in the second quarter and were worse than the 22% drop that BAS had expected, probably due to more challenging market conditions overall and tough comparisons with the high sales volume Lennar maintained throughout 2006.

One Realtor said "I stopped taking buyers to Lennar Homes, they cut off commissions to realtors. $10,000 flat commission, as opposed to the 5% other builders were offering. Bad move."

Friday, October 5, 2007

Pulte Homes - Bad Experience - Is Pulte Homes Good?

Lengthy Saga of a Negative Pulte Homes Experience
My Pulte Experience at The Reserves, The Timbers, Lenexa, Kansas by Susan Sabin
I had to split this page up as it was getting too large and unwieldly. So please take a look at the links above too. They show pictures of the damage that has and is occurring to this 'quality' built Pulte house. Of particular importance are the links that provide information on builders, binding arbitration, mortgage fraud and predatory lending. Pulte Homes a good experience?
You might ask after reading my site, why I haven’t consulted an attorney and sued. I cannot. Almost all new builders, including Pulte Homes, in the United States have binding arbitration clauses in their sales contract. This clause subjugates your constitutional rights. This means that if there are any problems, you have to use an arbitrating company of their choosing. Arbitration rulings are binding unless you are the builder. If you 'google' you will find that almost all builders, including Pulte have overruled the arbitration company decision and filed appeals. As a homeowner you cannot do that. Pulte Homes Sucks.
Paragraph 17 of the sales contract used by Pulte states:
" 17. ARBITRATION Any controversy, claim or dispute rising out of or relating to construction or design issues (other than claims under the limited warranty) shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association ("AAA") and the Federal Arbitration Act (Title 9 of the United States Code), and judgment rendered by the arbitrator(s) may be confirmed, entered and enforced in any court having jurisdiction. As a condition precedent to arbitration, the dispute shall first be mediated in accordance with the Construction Industry Mediation Rules of the AAA, or such other mediation selected by Us . Claims under the Limited Warranty will be arbitrated in accordance with the arbitration provision set forth in the Limited Warranty."
What can you do about this? Check out the link on predatory lending . Binding arbitration is considered predatory lending. Cross off this clause before you sign on the dotted line. No one can make you do something or be an enabler for something that is against the law.
Since I have lost my homeowner's insurance, I cannot get insurance from any other company. I also tried to get insurance through the state, but they won't touch this house. Even if Pulte replaced some gravel, and put in another basement floor, it would not allow my homeowners insurance to be reinstated. I was told that to get my insurance reinstated, the foundation would have to be stabilized (and proven to have been stabilized). This means total extensive foundation repair work, not the band-aid repair that Pulte is willing to conduct. This house will never be insurable and it will never be able to be sold or refinanced. This house is a total loss and needs to be torn down. Pulte needs to buy back this defective house and quit blowing smoke up everyone's skirt and pant leg as to the real cause of the demise of this house.
Pulte, the city of Lenexa, the housing inspectors, and the planning and development department do not want anyone touring this house. Why?
As of 12 October 2007 Pulte Homes is unwilling to repair this house to the state that will enable my homeowner's insurance to be restored.
If, after reading my web site, you are also appalled, please write Mr. Dugas , the CEO of Pulte and ask him to buy back my structurally defective house. His address is below. Mr. Richard Dugas, CEO Pulte Homes
100 Bloomfield Hills Parkway
Bloomfield Hills, Michigan 48304
I have linked his email address; however whether it will get to him, is unknown. I appreciate all of the supporting emails and telephone calls I receive.
This house built by Pulte is just going on six (6), now seven (7), now eight(8),now nine (9), now ten (10), eleven (11) months, one year, 14 months, now 15 months old!!!! I lived in this house exactly 28 days before I noticed problems. I am sure these problems were occurring during the building stage and before closing.
I want it to be known right up front that what I have to state below are facts. I am not embellishing, but stating facts that can be verified. In no way I am disparaging the builder. It is up to you to make that determination after you read the facts and see the pictures.
Please check by often. I add to my pictures and include all the damage that has occurred since I last posted. Your indulgence is also requested. There are a lot of pictures on this page and sometimes it will take a while to load. You may have to refresh your browser to get all of the pictures if you have a slower computer. I have divided my documentation into separate pages, but there is still a lot of information. Thank you.
I am a single woman. This is the first house I purchased by myself. As I mention below, I did a lot of research in regard to builders in the area in which I wanted to live. Unfortunately some of the internet web sites I have found since my house started to move, I found too late. I didn't, at the time have any reason to distrust the Pulte salesman, Pulte Mortgage or Pulte Homes. It never once crossed my mind that any transactions that occurred should have been cause for alarm. I am a person that has a strong sense of honor and integrity; unfortunately I thought others did too.
On January 7, 2006 I signed a sales contract for a ranch style house in the new subdivision The Reserve, The Timbers in Lenexa, KS. This subdivision is being built by Pulte. Pulte is one of the largest builders in the United States. Before I decided to purchase a Pulte home, I did a lot of research. My research indicated that in the last five years, Pulte has attempted to clean up their act, and was actually building some quality homes and giving customer service. Pulte even won the J.D. Powers award. I've learned a lot about the J.D. Powers . They do not take complaints. They base their awards on submitted surveys. Now I know why I was being pressured by the Pulte representatives to give them good marks on the survey. The Pulte representatives told me their 'bonus' and promotions were based on these surveys.
Here's a picture of the house. It is a cute ranch that has eye appeal. However, I call it the Hansel and Gretel house. It looks nice on the outside, but once inside - well you are thrown into the oven!

I have been asked to post some other pictures of the outside of the house. I have also added some pictures of the back of the house from afar. Check out the land on the right side of the picture. When it rains really hard, the house on that property can looks like it is sitting on an island.

On June 9th 2006 , I was afforded a walk-through. During this walk-through I was informed that one of the four inch thick isolation rings (the circle) that is situated on top of a four inch thick pier pad in the basement where the steel post that supports the steel I beam had started to crack a bit. I was told by the builder's customer service representative they were monitoring it. It didn't look like much of anything at the time. Little did I know. I closed on June 12, 2006 and started moving into the house on June 16, 2006.
I hired my own housing inspector before I closed on this house. Pulte was not too happy about it and kept insisting their inspectors were good enough. In this area of the Midwest Pulte is considered a good builder by the vendors, subs, housing inspectors and the other trades people. The housing inspector showed me the areas that Pulte did that were a little 'extra' and how well things were constructed.
The same housing inspector I had hired initially has been back to the house and free-of-charge offered to look at the damage and give his opinion. After looking at the damage and reading the results of the September 11, 2006 structural engineer report, he turned to me and said, "You need a lawyer." He said the same as a lot of people do - "What about the warranty?" Well that warranty is only as good as the builder wants it to be. In my opinion the warranty is just a draw to get you to buy a house. Once you need to use it, the warranty becomes a limited warranty and then it becomes nothing. However, this is not about the warranty. This is about defective construction. This isn't a leaking faucet or knobs being crooked, it is about a house that is literally falling apart. This is about a builder who built a house without any thought or concern for the safety of the people that would be living in it. This last statement is made based on what I have mentioned above.
NEW This past summer, 2007 I was included in a flyer given out by the organization Building Justice. The flyer is about Pulte and their home warranty exclusions .
On July 11, 2006 I emailed the customer service representative asking if the basement door and the door to the garage (from the utility room) could be fixed because they were sticking. They stuck so badly that I had to put my shoulder into the doors and shove. Little did I know until I conducted some research on the internet this is an indication of movement in the foundation. At this time I had lived in this house a little under a month.
Since that time period, there are have been four structural engineers conduct an inspection of this house. The first and fourth engineer was hired by Pulte. I hired the second engineer because the problem remained unabated and is getting worse. My insurance company hired the third. Below you will find some pictures. I have posted some of the engineer reports on another page .
The basement of this house was built using four feet by four feet four-inch thick square pier pads. They are placed on sections of the ground once the basement walls have been poured and the flatwork ready to be completed. On top of the square pier pads, there is a circular isolation ring 4" thick. . They are not bolted down and secured in any way. The basement floor is then poured. This is called a floating floor. The theory is if the basement floor moves these pier pads will remain steady and will alleviate any damage. Using these pier pads and isolation rings also allows the builder to pour a 4-inch concrete floor.
The stairway is supposed to be built so that if the basement floor moves and or shifts, the stairway will be able to move. Unfortunately my stairway was not made that way. It was built rigid. When the basement floor moves, it pushes the stair up inflicting damage on the floor above such as the bowing joist in the utility room, buckling and cracking drywall. This is a structural defect and a design flaw. Something to note is that the stairway is only made to be 'floating' on one side, so therefore when the basement heaves even with using the given 'theory', the other side of the stairway is prone to heaving. - a design flaw.
If I wanted to finish my basement I would have to make any walls floating. If not, when the basement floor moved it could do the same thing that is happening now - rising. Since the house was built on expansive soil, there is sufficient evidence to indicate the house will rise and fall depending upon the saturation content of the soil.
In addition on December 8th 2006 , when the Pulte representatives were 'over-seeing' the experts it was discovered by one of them that one of the basement windows is cracked. This is because the floor is rising and causing the basement wall to rise and in turn is putting pressure on the window, thereby causing it to break!
Since the October 11th 2006 inspection, the living floor has bowed in three places which can be visually seen causing the wooden floor slats to begin to separate. There are more cracks in the drywall in various rooms in the house. The plumbing pipes are begin to show stress from being compressed by the floor rising. The ductwork and pipes from the furnace and the water heater are bending more as the floor rises. The stair way continues to separate from the wall, the boards are being pulled apart and the stair frame is splitting and cracking. The stair frame is also rising above the steps. This can be visually seen. The blue insulation strips that are placed in between the basement top and the framework continues to be 'spit' 'squeezed' from between the two. The bolts that hold the sump pump pipes to the wall are being pulled from the concrete and the concrete is also cracking off in small hunks. The hairline cracks have gotten larger and one of them leaks when ever it rains. The one gas pipe that leads to the furnace was replaced with a flexible pipe because of an impending safety issue.
When I first moved into this house, the floors did not squeak or sway. They shouldn't because a silent floor type material was used for the joists. Now (posting this October 26th 2006 ), when I walk across the room, things I have on my table jiggle or move. The mirror above my dresser in the master bedroom sways back and forth. The floor makes noises. Of course the reason for this is the floor is heaving in places, and the more it heaves upward, the more uneven it becomes. In addition there is no support for these joists. They are just 'out there' within nothing to rest on. Of course they can't rest on anything because they have been pushed up.
The Pulte lawyer has stated in October 2006 they (Pulte) don't believe my engineer's report. Pulte believes there is nothing wrong with the house that a few years of settling won't fix.
As of October 2006 except for fixing that one gas pipe that I insisted be fixed they have done nothing or provided me with a way to fix the problem or to buy this house back.
What did the Pulte operations officer tell me after the first inspection in September 2006 ? "There is nothing wrong with your home."
I continually ask that Pulte find out what the problem is and fix it. They will not address the issue nor talk about it. What will Pulte do for me for this brand new home that holds a 10 (ten) year warranty (especially on foundation problems)?
Pulte will cut down (cut out a piece of the joist) the raised joist so that a new door can be installed so I can close the door to the garage. They will tape and mud over the separated dry wall on the cracked areas. They keep telling me they will do their best to make me happy and will do what it takes, but it is obvious this house needs more than a little band-aid.
Check out above how they fixed the door on December 8th, 2006. Let's see from July to December that is about five (5) months!
In the meantime, the damage gets worse on a daily basis. What is worse is that in my heart I know that Pulte knew there was a soil problem before this house was built. I live on a corner and there is only one other lot on this corner. Pulte chose not to build it after pouring the basement and the flatwork. They told me that it was because the lot had not sold, but since out of approximately ten houses being built mine and the one across the street were the only houses that were not speculative (spec), that doesn't pass the logic test. In addition the floor in the basement next to me is cracking and heaving AND there is no weight on the basement. I also noticed that Pulte has added extra pipes for drainage and run an extention cord to run the sump pump. This is not normal procedure for a house that is in the basement stage.
Because I have talked about the lot next to me that was halted after the basement/flatwork stage, I have decided to show some pictures. Click enter to take a peek! I have added some new pictures. We have had some horrific rains and the basement now looks like a pool!
A day or two after I posted the pictures of the basement, Pulte people were there fixing the sump pump and pumping out the water. I have just discovered ( June 23, 2007 ) the lot has been sold. Before the sold sign went on the placard (see pictures), Pulte had taken out the basement floor, they pushed dirt against the areas that have sunken to hide the "holes" and spruced it up. It is unfortunate the people who purchased this lot bought a house that has foundation problems even before the first board is nailed with a hammer.

In October 2006 I received a flyer from the Corps of Engineers. They are holding a hearing on the property to the east of this house. Evidently the property this house rests on used to be part of that parcel. This specific area was in a canopied tree line. The Corps of Engineers is going to fill in the two farm ponds and the outlying wetlands. Being so close to that property that has been labeled 'wet lands' why wasn't a soil test conducted on this property before anything was built?
If the foundation shifting and moving causing the basement floor to heave and rise and the pier pads to rise and push the steel I-beams upward continues accelerating at the level it is now, this house will be unsafe to live in by the end of the year. In the meantime I have to continue paying the mortgage which BY THE WAY is with Pulte Mortgage. Update Even though Pulte Mortgage and Pulte builders are very well aware of the issues with this house, the loan was sold. Needless to say the new lender is not happy.
Resale value of a BRAND NEW house with foundation problems -- $0
Refinance of a BRAND NEW house with foundation problems -- $0
The sale price of this house was $313,100. Incentives brought the sale price to $294,130.00. This was the appraised value of the house when I moved in June 16, 2006. The appraised value of the house on 1 January 2007 is $174,900 . This is a devaluation of the house of $119,230 in just SIX MONTHS!!!
Could I sell the house for $174,900? No. However, I was offered $40,000
In July 2006 I asked Pulte to find out what the problem was. They offered to fix the door to the garage and to patch the drywall at the end of the basement stairs. As time went by, even after the first structural engineer inspection was conducted, the only thing that Pulte would fix was the door and the dry wall. All of this from the very beginning has been very inconvenient. It is through no fault of my own this house is falling apart. I purchased what I thought was a brand new home FREE of defects. What I received was a house that has major structural defects that continues to accelerate.
Why would I want Pulte to patch some dry wall and replace a door that will continue to damage. The answer from Pulte? They will come and fix it again. This does NOT solve the problem. The damage that is occurring are symptoms of the actual problem. I told Pulte until they find out what the problem is and fix the problem, it was worthless to fix something and then have to fix it again. I have already taken enough time from work. I believe any reasonable person would come to the same conclusion as I have.
Since the October 11th 2006 structural engineering inspection, there are about 10-12 I-joists that have begun to split and a couple have started 'peeling'. This is not a good thing, especially when these joists are made not to split. This means the pressure placed on the foundation of this house is incredible. The stairway continues to come 'apart'.
A technical representative from the joist company came to the house to examine the joists. After his examination, I asked him about the issues regarding the splitting and he looked at me and said, "Splitting joists are the least of your problems." These joists are not supposed to split and he explained why they are. The steel posts are pushing the steel I-beam up. This in turn is pushing the joists up. As the joists are pushed up the ends that are held down by the framework are being pushed down by the pressure and therefore are splitting. I have to monitor the splitting and once they get to a certain length (they are currently between 5" - 15"), it will become a problem with the integrity of the house. I will continue monitoring the joists.
I am truly concerned that in the near future I will be walking down the stairs and the stairway will fall. At least at this point in time I don't have to worry about the gas line getting a crack and blowing up the house. I made Pulte replace the gas line. They had the report that said the gas line was a imminent safety issue and only after four days when I demanded it be changed, it finally was - some 5 hours later. I have a gas fireplace and am afraid to light it.
I have also found that on the north one-half of the house, the framework has come off the foundation 1/2". It may be more, but that was a significant number by itself. This explains why the blue insulation came out. The pressure from the house pushing down on the joists squeezed the blue insulation out just like squeezing a twinkie.
There has been movement in the framework of the garage. I can tell because the bottom corner of the garage and the concrete 'lip' of the garage floor is continually getting further apart. This is a problem but what makes it worse, field mice can enter. I have stuffed papers in the hole, but mice are tenacious. Because the door from the garage to the utility room will not close, I now have a rodent problem. I live in a home that is only four months old and have to contend with serious structural defects and a rodent problem.
It has now been discovered the garage floor is rising!! I probably forgot to mention previously, but the entire garage floor has cracked and separated from the foundation around the perimeter of the garage. As I mentioned above, the framework to the garage has moved and while I and another person were looking at it, he remarked, "look at your freezer!" It was tilted. I have measured it and will post pictures but one side is 15/16" of an inch higher than the other. This is incredible since the movement has happened in the last month.
The posts that hold up my deck are splitting down the middle vertically. However, the housing inspector said that was normal and there was no problem. Since this housing inspector was the one who approved the foundation inspection, I am skeptical. I will post some pictures and if I am mistaken and someone knows, please let me know and I will stand corrected. The deck is also coming away from the house. If that is not the case, the house is falling away from the deck. Either way, it is not good.
The front step to the house is rising now. You can visually see the threshold of the door slanted and the door looks cock-eyed. In addition it is starting to squeeze the siding on the west wall.
I mentioned above that Pulte Mortgage held my mortgage. I received a letter they sold it to Chase Finance beginning December 2006. Chase did not realize they purchased a mortgage on a house that isn't even worth the mortgage, or even the down payment! I am currently looking into this situation. An update on this. Chase is stuck. They are not happy at all.
Finally agreeing to hiring a foundation expert to pull core samples, Pulte contracted a company for December 8th 2006 . There was also another structural engineer inspection and another firm that took laser readings on this December 8, 2006 . I agreed to the inspections so that it will provide the higher management at Pulte the justification necessary to buy back this house as soon as possible.
The geo tech core sampling test results are in. If you would like to read the report, please click on enter.

While walking around with the structural engineer on December 8th 2006, more damage has been found. One of the windows in the basement is now cracked, evidently from the pressure. There is a 1/4" or more crack at the beginning of the hall in the ceiling, which is indication the house is tending to 'crack' in half. Also around the sides of the two back sliding doors, are cracking.
When I made a remark about the garage floor rising on December 8th, the president of the local area said that the floor was made that way. Rising so that the tilting of the freezer is very obvious and the brackets to the garage doors and the garage door openers are bending?
This house continues to degrade and to fall apart. Each time I say that the VP of construction of the Greater Kansas City area keeps saying, "that is your opinion". Structural engineering reports are stating this house is continuing to deteriorate.
I have been in contact with the geotech company since the report has been written. I told the president of the company that even though his 'opinion' that the basement floor would not rise any longer, it has. The problem is not only the expansive soil, but that the soil is saturated at a 97-98 percent. No one from Pulte or their companies on retainer have addressed where the water is coming from and or going and what can be done to stop the water flow. Please remember Kansas has been in a drought for two years now and having 'fat clay' (expansive soil) saturated at such a rate means there is an additional problem.
I continually ask how the basement floor rising pushing everything up will affect the roof. Pulte continually tells me there is no damage. On the 13th of December 2006 I decided to look for myself. The attic opening is in the garage. I put the ladder against the opening and climbed up. I climbed so that I was waist high. I didn't go into the attic since I live alone and if there was a problem, I would be in trouble. So I decided to see what I could just by standing in the opening. I found three boards that are perpendicular to the attic floor joists that are split, cracked and bending. These are not little cracks, they are substantial. I also found that at the top of the roof where it crests and the OSB board (I am sure it isn't plywood) arches together, at one point that I could see, it is separating. Below are a few pictures of what I could see and take decent pictures. The first two pictures are of the same piece of lumber, just better shots. The third board was too difficult to take a picture. I am speculating there is more damage in the attic in areas that cannot be seen. This house is unsafe . If you disagree, please drop me an email. If you know what these cracking and splitting boards will do to the integrity of the roof, please drop me an email.
Upon my insistence a pulte representative in the construction area came to the house on December 14th, 2006. I told him about the boards. He climbed into the attic. He leaned up on one of the boards and it broke into three pieces. He didn't see me, but I saw him. He patted the board back together. His assessment? He said that when the trusses and lumber are delivered it sometimes gets dropped. He is basically telling me that the boards were framed broken. He told me that the movement in the basement is not causing the boards to break.
The Pulte representative, the VP of construction of the greater Kansas City area told me the house was safe. Even though in my email I wanted to know what Pulte was going to do to shore up the roof, I have not gotten an answer. I was finally notified they are not going to do anything. Now that the geo-tech report has been finished, Pulte wanted to conduct a 5th structural engineer inspection in the attic. Why?
I found out via an email received on December 17, 2006 that pulte is telling people that I have not allowed them in this house (at all) to address any of the problems. This is untrue. The president of the pulte Kansas City area and the vp of construction were in this house on December 8, 2006 when the geo-tech guys were pulling cores, the structural engineer (inspection #3) and the foundation laser reading company were doing their thing. Now the vp of construction was at the house and in the attic on the 14th of December. They were in the house on January 4th attempting to fix the one door.
Regardless my comment was that I didn't want anything repaired until Pulte found out what the problem was. I don't want to expend any more time when the same thing is continually being repaired. Until the problem is solved, the 'symptoms' will continue to degrade. The broken boards, rising and splitting wood floors, racked windows, et al are 'symptoms' of the problem.
I have also found out that Johnson County is considered a zone 1 (high priority) for radon gas emissions. I do not believe my house was tested for radon. If it was tested, why didn't I receive a copy of the report? Upon review of the sales contract, it is the homeowners responsibility to test for Radon.
As of 14 January , I have not received either the structural engineer report or the report from the geo-tech on the core samples. The laser readings can be accessed here .
If you look at the numbers from the October 11th laser reading and the December 8th reading, they are still not as they are supposed to be! update
I was told on Wednesday evening, the 17th of January 2007 by a gentleman that came to my house that Pulte people were saying "terrible things about me".
Cosmetic versus structural. I have been informed in writing by Pulte that my I-beams, I-joists, the basement floor and basement (walls) are cosmetic. They are not cosmetic but the answer came to me on page 16, section 2 of Pulte's ten-year warranty. This is in the framing section but gives you the answer. paragraph 2.4 states:
"Cosmetic components will be repaired for a period of one year."
Enough said.
As ofMarch 5, 2007, Pulte is still stating in writing that there is 'nothing wrong with my house".
Pulte is now admitting the problems with my house were due to shoddy construction and poor workmanship, but it isn't their fault. They said it was the fault of the subs and me! (homeowner neglect)
April 17, 2007. I have been trying to ignore the signs, but again the front door is causing problems. The 'band-aid' fix that Pulte used to 'fix' the front door didn't hold. The door is getting very difficult to lock. If I brace myself against the door and hold up the handle I can get the lock and slot aligned to lock the door. The door is still unusable as of 30 July 2007. It is supposed to be repaired again by Pulte for the third time on 2 August 2007
I have seen Pulte's work proposal . Basically except for a few items in the least expensive option the geotechnical company suggested, Pulte wants to basically do very little to fix the problem. They will take out the basement floor, scrape off some of the offending soil, put in a drain and some gravel and put the floor back. They offered to fix the broken window in the basement and to mud over some of the cracks on the upper floor. The structural engineering firm, doing what Pulte tells them to do says the damage to the rising floor and the wood floor slats splitting and separating is because I didn't install a humidifier and it is normal wear and tear. When I filed my complaints with the trades board I made sure I included the receipt for the humidifier which I had installed two days after I moved in.
This house needs to be bought back by Pulte. The damage is getting worse.
April 27, 2006 a HVAC service member came to the house to check the furnace. A Pulte customer service representative was present too. Pulte could not deny checking out the furnace because it is one of the basics that is necessary and by law they cannot deny. I also had some issues with my hot water heater, but it was actually caused by some type of part in the shower faucet. Supposedly a part is being ordered to fix it. The furnace thermostat had an issue and it was fixed. Evidently it caused the fan to go on too much and therefore was sucking in too much cold air and causing the heat to turn on. This in turn caused a high heating (gas and electricity) bill.
We have been having a lot of rain and I mentioned that every time it rains, the one crack leaks. the Pulte customer representative went into the basement to check it out. Of course when it is not raining, you can't tell, so I have posted above the crack a really nice picture of the leaking that occurs. Pulte is evidently going to fix that. This is well and good, but will it restore the value to this house? The answer is an unequivocal NO!!! This damage has to be disclosed when selling and I can't imagine someone buying a house that has or has had leaking issues in addition to everything else.
The damage is getting worse. The floor is rising more causing bending and holes in the pressure points in the furnace duct. The HVAC repair guy told me that. As I mentioned it is difficult to lock the front door again and the threshold to the utility door is slowly but surely rising again even though it has been nailed down securely as was told to me by Pulte. I showed the Pulte customer service rep where the deck is coming away from the house. The cracks in the posts are getting worse also. The crack that runs parallel to the hallway is not only getting wider it is uneven. Pulte knows how bad this house is. Pulte knows this house can never be restored to the brand new house I purchased. Again all I am asking for is what I paid for - a brand new defect free house, as stated in their sales contract. This house was guaranteed to be defect free at closing.
On Friday May 11, 2007 , a representative toured my house. I told him the front door has been 'fixed' twice and because of the shifting of the house, it is broken again. I told him I couldn't lock the front door unless I leaned against the door, pushed up on the door with the handle and worked the lock back and forth until it eventually locked. He said, "Here let me try." So he did and he said, "I guess it doesn't lock." How safe can this be? In addition I cannot enter the door using the keys. It just doesn't work correctly.
If Pulte had found what the problem was when I requested in late summer of 2006, this house would probably not be damaged like this. They continually resisted and in my opinion only after I was on television did Pulte say they wanted to find out what the problem was. Of course now, it is being said that it is my fault. Well, it is NOT. It is not my fault that Pulte resisted time and time again. It is not my fault that Pulte didn't want to find out what the problem was. It is not my fault the damage has escalated. It is not my fault that Pulte didn't take the time to conduct soil testing before the house was built and/or during construction.
During the morning of Friday the 25th of May 2007 , a crack in the basement was caulked/siliconed over to prevent leaking. In addition, there was a malfunction with the shower faucet component in the master bathroom. This was also fixed. I have to believe the shower component will give me no more problems. However, with the foundation walls buckling whether the crack will cease to leak, well that is an unknown.
As of 20 June 2007 , my homeowners insurance was cancelled. My insurance company of over 30 years told me they could no longer take the liability that the house would fall down or someone would be hurt. I tried various other insurance companies and they would not insure me either. I tried to get "forced" insurance through the state of Kansas and I was again turned down. Insurance companies do not cancel your insurance for paltry repairs or cosmetic repairs. This is very serious. Pulte's band-aid patch would not allow this house to be reinsured. Pulte still denies there are any problems except for minor repairs.
Yesterday, Wednesday the 27th of June 2007 Pulte finally laid the last length of sod along the west side of my property, approximately two feet wide and the entire length of the property. I can't tell you how long I have been telling them they didn't finish sodding my property. One of my sprinkler heads was on the unsodded part and as part of the work proposal Pulte did offer to move the sprinkler head onto my property. It was already on my property!!! My question is, after almost a year of arguing this issue why are they willing to put down sod? Is this going to remedy the defective construction? Since I cannot use my sprinkler system nor water my lawn because the geotechnical company recommended I do neither, who will water is in question.
On 28 June 2007 the HVAC guys came to check out the air conditioner. It was not working. I had a problem in the winter in that it was not working. The HVAC guy changed some parts and it supposedly worked. Instead of trouble shooting the system Pulte had the entire unit replaced. That sounds like a good deal. However, I was supposed to have gotten a heat pump when I closed on the house. Instead I was given a 'plain' air conditioner. This was the reason I was given a new unit. Pulte did not deliver the product that was stated in the sales contract. The HVAC guys installed the new unit and the unit still did not work. Upon investigation it was found there was a blown fuse. When they fixed the fuse there were sparks, except not in the right place. Further investigation found that the wire line from the thermostat to the furnace had been squeezed and pinched in between the I-joists and the floor board. The HVAC guys had a hard time pulling out the wire and when they finally got it out discovered the reason the unit did not work and the fuse blew. The floor rising pushing up the I-joists caused the wire to rub in places exposing the copper wires. I was fortunate because this is a fire hazard. I am posting a couple of pictures of one or two areas of the worn wire.

On 2 August 2007 , I met with the Pulte customer representative. We started to go over the list of 56 items I had for the 11 month walk-through. According to the warranty, there are supposed to be several walk-throughs over the year. This is my first one since before closing. I had to demand this walk-through. After going through four or five of the issues, he didn't want to go through the rest on the list. I told him there were two easy fixes on the list and one was the dead tree on the easement, and the screen door. I stated I told the Pulte customer service representative three weeks after moving in they forgot to put a screen door on the slider. The Pulte customer service representative on 2 August 2007 told me, and this is exact, "the screen door is on order." I looked incredulous as I stated, "It has been on order for a year?" I was told by the customer service representative if Pulte went to the trouble to get experts to find out everything that had to be repaired, I had to agree to the repairs. I would not. I would not agree to something I had no idea what it contained.
Also on this date, the front door was 'repaired'. The hinges on the door were tightened, and the part on the door frame was moved lower to accommodate the door lock because the door is being moved because of the foundation rising below. I was told that in order to lock the door I have to either push with my shoulder or my hand and then lock. If I do not , the door lock will not fit in the part on the frame and of course will not lock. This is a band-aid repair and does not fix the door or the problem. (I will be posting pictures shortly)
The garage door railing was also fixed on 2 Aug 07 . The garage door guy, in front of the Pulte customer rep told me the brackets (the hold up the railings)were supposed to be bent. Of course, they are not as evidenced by the one bracket at the northwest side of the garage. The garage door was very difficult to open and shut and being afraid it would be caught up or down or not open, I requested it be fixed. Because I could not get into the front door I could foresee a horrific situation in that I would have to break a window in order to get in if the garage door failed.
The problem was the top railing is bolted to the ceiling and bends around the top of the wall. There is another piece of railing that fits against it and continues to the floor. The top railing had been pushed out of sync with the bottom railing. The garage door guy took a big hammer and started banging on the railing until it was in alignment with the bottom railing. He loosened and tightened some screws, greased the springs, loosened them a bit and the garage door is fixed, for now.
My friend Cindy and I met with the VP of Finance of the greater Kansas City area for Pulte on Wednesday the 15th of August 2007 . I am making the assertion that he is the acting president as the other president is no longer an employee. The gist of the conversation is that Pulte wants to do something that will make both of us (Pulte and me) happy. Pulte is unwilling though to repair the house so that I can get my insurance reinstated. They should garner some integrity and honor and buy this house back. I closed on a house that was promised to me in the Pulte sales contract that it was free of defects. It NEVER was.
On Monday, 27 August 2007 , I received an email from John Conley, the VP of Finance (acting president of the greater Kansas City Pulte) at 9:58.58 a.m. stating that if I agreed to the repairs then Pulte would give me a revised work proposal. I will not agree to a proposal that I cannot review and it would be stupid on my part to do so. The initial work proposal did not address the cause of the damage nor does it address 95% of the damage. In addition it would not allow my homeowner's insurance to be reinstated. As I have mentioned before, Pulte will not even repair this house to the point where I can get insurance. This house has been deemed structurally defective (unsound) by three insurance companies and the state 'fair plan'.
The two pictures below show how the front of my property is sinking. Looking at the house on the lower east side (left) you will see a water pipe. Please note how close it is to the ground. This picture was taken on 30 December 2006 . The picture taken on 6 October 2007 shows how far my property has 'sunk' since December. I posted the full picture so the date the picture was taken can be shown. Then I cut it so that the corner is more easily seen and can be compared with the most recent picture. This is a substantial degradation in the property line since December 2006. This water pipe is in line with the gutter that is sinking also. I do not know what is causing my property to sink.

These pictures were taken on 13 October 2007 This shows what my back yard property line looks like after a few hours of rain. When we have one of the serious storms, the water is about four to five times the volume and is almost to the back of my deck. You can see my neighbor in the back has placed rocks to slow down the water flow. He has two swales around his house and during the last storm, his house looked like it was on an island.

Remember this house is only going on 6 months, 7 months, 8 months, 9 months, 10 months, one year, 13 months, 14 months old, now 15 months. I don't know what is going on beneath this house, but it is happening at an alarming rate. Just imagine the type of force that is required to push the framing off the foundation 1/2 inch in 4 months!!!
I now know what is going on beneath the house and it is not good. Expansive soil. I have found the entire subdivision has been built on expansive soil. Evidently there is a huge area that includes this subdivision that has expansive soil, and wetlands. This is not the only new subdivision being built in this area either. These new findings only validate what I say - make sure the soil is tested before agreeing to the purchase of any house regardless of the builder.
The bottom line up front. the soil was not tested before the house was built. Therefore the foundation was not designed, engineered or built properly to withstand the expansive soil environment. Once the house was built, the foundation failed causing structural damages and defects. This house will never be the same. It will never be what I paid for - a brand new home free of defects. It will never be able to be sold. Who will buy a house when I have to disclose (as stated by the law) the house was built on expansive soil?
If the soil was tested and the foundation designed and engineered correctly none of what I state on this web site would probably have happened. Is this my fault? Of course not. I simply trusted the builder and his sales staff and that was my mistake.
I am posting the work proposal sent by Pulte.
This link will take you to the results of an infrared inspection which found vinyl siding installed incorrectly and moisture is being leaked in between the vinyl siding and the framework when it rains and more. This inspection was conducted on my friend's house who also lives in a defective house. Upon inspection of other homes in the neighborhood, their vinyl was installed the same way.
I have told no lies or embellished the truth on this web page. If you are local and would like to tour the house, please send me an email. I can provide proof for everything I have stated.
Attempting to be a detailed person I have kept every email and piece of correspondence from Pulte since January 2006. I even have some emails between the sales person and I before I signed the contract on 7 January 2006. I have the proof. I decided to post a picture of "the book". It is concise. In fact there is 13 one-half pounds of documentation.
Pulte Homes professes their ten year warranty/home protection plan endlessly. You will find it in all of their advertisements and signs along the roads in their developments. However, if you read the plan, they have breached their own warranty when it comes to this house.
Pulte Protection Plan – Warranty
Case in point: Page 3, Your rights and the rights of your home “The Spirit of the Warranty — Our warranty commitment is easy to understand and is based on COMMON SENSE. We believe The Homeowner has a right to expect a clean home complete and free of defects at the time of closing . Things should work.”
pg 4 What the Homeowner has a right to Expect from the Builder : 1. Soil Drainage — Your home has been placed on soil engineered to withstand the anticipated settlement based on soil conditions found in your area. It should not settle in such a way as to create structural problems during the warranty period.
Under section A. The Limited Warranty, page six (6), the warranty states: Ten Year Coverage — The Builder warrants the construction of the home will conform to the tolerances set forth in the below Performance Standards for Structural Elements for a period of ten years after the closing date, subject to the limitations set forth below. Structural Elements are footings, bearing walls, beams, girders, trusses, rafters, bearing columns, lintels, posts, structural fasteners, subfloors and roof sheathing.
If you tour this house you will see a slide presentation taped all over the house. It tells what has happened and what is happening and when. It also tells you about your First Amendment Rights. Don't ever be intimidated by people threatening your right to free speech. Check out a few of the signs people see that tour this house. It definitely is an eye opener. Yes, the front door has been temporarily fixed. Even though the shifting of the house is causing the door to become uneven and coming off the hinges, Pulte took off the existing rubber insulation and put up a super duper big piece of insulation. The front door problem was not fixed, but was given a band-aid.
The front door has been fixed twice. It is now misaligned again because of the movement of the house. I have to stand on a chair to get leverage (or else stand on the tip of my toes which doesn't give me much power), lean against the door and pull up on the handle to get the lock to align so that I can lock it. The west side of the door frame is being pushed up by the foundation wall. The lock apparatus is at least 1/2" or more from one another. The door has become so uneven, in order to lock the door, one person has to push against the door and hold it up, while another person jiggles the lock until it can fall in place. When people come to the house, they have to come in by way of the garage. The door is scheduled to be repaired again on 2 August 2007 . update The door has been given another band-aid repair.

Amendment 1 - Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
More insight into the legal explanation of this amendment can be read on this page: First Amendment - An overview
Of particular interest is the following:
The most basic component of freedom of expression is the right of freedom of speech. The right to freedom of speech allows individuals to express themselves without interference or constraint by the government. The Supreme Court requires the government to provide substantial justification for the interference with the right of free speech where it attempts to regulate the content of the speech. A less stringent test is applied for content-neutral legislation. The Supreme Court has also recognized that the government may prohibit some speech that may cause a breach of the peace or cause violence. The right to free speech includes other mediums of expression that communicates a message.
Despite popular misunderstanding the right to freedom of the press guaranteed by the first amendment is not very different from the right to freedom of speech. It allows an individual to express themselves through publication and dissemination. It is part of the constitutional protection of freedom of expression. It does not afford members of the media any special rights or privileges not afforded to citizens in general.
We are also protected by other laws. USC Title 18, Section 1513, federal whistle blower laws protects those that are informing the public about possible federal crimes such as predatory lending.
If you want to talk, have stories of your own, or would like some information, please send me an email.