Tuesday, May 27, 2008

Texas Homebuilders Buescher Homes Files Chapter 7 Bankruptcy -

From Wfaa Dallas Fort Worth - North Texas may not be bearing the brunt of the national housing bust, but some local businesses are feeling the pain.

Several local homebuilders have gone out of business. Others are scaling back their operations, cutting jobs as revenue and profit fall.

"The builders have really ratcheted back the size of their organizations," said Ted Wilson, an analyst with Residential Strategies Inc., a Dallas-based research and consulting firm. "Most of the builders I've talked to have reduced their overhead by 30 percent to 50 percent."

Even some local manufacturers are taking a hit. Window maker Silver Line Building Products LLC, a unit of Minnesota-based Andersen Co., recently said it would have to cut 250 job cuts at its Garland plant.

The cause was falling national demand for the company's windows, said Maureen McDonough, a spokeswoman for Andersen. Housing starts have fallen more than 50 percent nationally since their 2005 peak, according to the U.S. Census Bureau.

"We've scrubbed our budgets for three years, and we've done a number of voluntary programs to reduce labor costs," Ms. McDonough said. "Unfortunately, we had to have involuntary reductions now."

Of course, the housing bust is not taking the same kind of toll in Texas as it is in the epicenters of the downturn, such as California and Florida.

Those states have lost more than 80,000 construction jobs apiece since December 2006, according to the U.S. Department of Labor.

Texas, with a milder housing downturn and robust nonresidential construction, has actually added more than 23,000 construction jobs since the end of 2006.

Still, the national trouble has clearly led to a significant slowdown in the local housing market.

Builders started 5,218 homes in the Dallas-Fort Worth area during the first three months of 2008. The total was less than half the 13,731 homes that builders started at the market's peak in the second quarter of 2006, according to data compiled by Metrostudy, a research and consulting firm for the housing industry.

Cutting inventory

"Really what the story is, for the last year or so, builders have been focused on reducing inventory," said David Brown, director of Metrostudy's Dallas office.

Buyers closed on just 7,036 new homes from January to March this year, compared with 12,518 closings at the peak in the third quarter of 2006, according to Metrostudy's figures.

It's harder for would-be homeowners to obtain mortgages because of the global credit crunch. The North Texas job market remains healthier than the national average, but the growth rate has been slowing. And with the U.S. economy hitting the brakes, fewer people want to buy a new house.

"Consumers are not real confident, so they're not quick to make a purchase decision on something this major in this kind of environment," Mr. Brown said.

Companies crumble

The deteriorating North Texas housing market has taken down several local companies with it.

Local homebuilders, including Goff Homes and Colonnade Homes, are no longer marketing houses, and their telephones have been disconnected.

Last month, Arlington-based Steelman Homes LLC, a property management company, filed for Chapter 7 bankruptcy, which provides for liquidation. Richardson-based homebuilder P.B. Building Inc. also filed for Chapter 7.

"A lot of homebuilders have been caught with tighter profit margins and the inability to sell a lot of properties," said Patrick Neligan, a lawyer whose firm is representing P.B. Building. "That kind of double whammy can be seen throughout the housing industry."

Frisco-based Greystone Custom Homebuilders Ltd. filed to reorganize under Chapter 11 bankruptcy.

Carrollton-based Buescher Interests LP entered Chapter 7 bankruptcy in February, but it later switched to Chapter 11. A lawyer for the company did not return telephone calls seeking comment.

Buescher left empty lots and unfinished homes when it went out of business.

Some of the properties were in Craig Ranch, a 2,500-acre master-planned project in Collin County. The development reacquired the properties, said David Craig, Craig International's chairman and chief executive.

Other Buescher homes were in a nearby development called Panther Creek Estates. All told, Buescher left about 70 properties in Frisco, most of them vacant lots, said John Lettelleir, the city's director of planning and development services. The city has been cutting the weeds.

"We just did that earlier this month on the Buescher lots," he said.


Anonymous said...

Anyone out there know of any connections, whatsoever, between Buescher Homes and Mercedes Homes?

Anonymous said...

the answer to that would be yes...Mercedes Homes filed chapter 11 bankruptcy on Jan. 26, 2009...it won't be long and it will be chapter 7
don't trust a Buescher ever!

Anonymous said...