Thursday, October 9, 2008

Sheridan Homes of Texas Files Chapter 11 - Vacant Lots and Unoccupied Homes Left

Plano-based Sheridan Homes of Texas is among at least four North Texas home builders to file for bankruptcy protection this year as the housing industry continues to struggle nationwide.

When it filed for Chapter 11 protection in early August, Sheridan reported 100 vacant lots and 80 finished but unoccupied homes.

In addition, the company was building five homes in Grand Prairie and Waxahachie that had already been sold, court records show.

"Because of [Sheridan’s] precarious financial position, the [company] was unable to fund the completion of the homes and deliver them to the buyers," the company said in court documents.

Buescher Homes, Goff Homes and Steelman Homes are other North Texas builders that have filed for bankruptcy this year, according to court filings.

Large national home builders, including Fort Worth-based D.R. Horton, are feeling the pain of the national slowdown. Horton reported a loss of $1.8 billion between September 2007 and June 2008.

The company sold 36 percent fewer homes in April, May and June than the year before.

"The home-building industry is not in a recession," Chairman Donald R. Horton told shareholders in January. "It’s in a depression."

Sheridan’s outlook

An attorney representing Sheridan Homes did not return phone calls seeking comment.

Phone service for the builder’s Plano offices and several model homes appeared to be disconnected.

A call to a number posted on sales signs went unreturned.

Sheridan has 34 properties posted for foreclosure in the Oct. 7 auction. They are in Mansfield, south Arlington, Azle, Fort Worth and Grand Prairie, according to a list from All American Title Service in North Richland Hills.

Sheridan Homes builds in the Dallas and Fort Worth areas; its houses are generally priced from the mid-$100,000s to the low $200,000s, according to the company’s Web site.

Homes on Decoy Drive and White Willow Lane in south Arlington were vacant Thursday afternoon.

What appeared to be model homes were empty, and at least two were on the foreclosure list.

The landscaping at the brick and limestone homes was unkempt, with weeds growing.

What’s ahead

North Texas home builders have been under pressure to sell homes against stiff competition, and they have faced higher building costs, said David Brown, director of the Dallas-Fort Worth region for Metrostudy. As a result, home builders have had decreased profitability.

"The margins have been really low," he said. "Profitability has been a real challenge."

Still, he said home builders in Texas are not suffering as much as those in other areas of the country, such as Florida, where the sales slump is deeper.

The Home Builder Implode-o-Meter Web site,, lists 77 builders that have gone out of business around the country since late 2006.

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