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, builder-implode.com, lists 77 builders that have gone out of business around the country since late 2006.
Showing posts with label Central Florida real estate. Show all posts
Showing posts with label Central Florida real estate. Show all posts
Thursday, October 9, 2008
Friday, March 7, 2008
When will the Homebuilding and Housing Industry Turnaround?
From the Chicago tribune today:
The housing industry could see a turnaround before the end of this year, but only if Congress takes action beyond the current economic stimulus plan, and the credit markets stabilize, the head of the National Association of Home Builders said here Friday.Overhaul of federal agencies responsible for the housing industry has been on hold for five years, and action is needed quickly, said Jerry Howard, CEO of the builders' group."There has been a lot of finger-pointing, but action has been too slow," he said. "Current regulation has been dysfunctional and has been too slow to help the industry."Action is needed on an overhaul of the Federal Housing Authority and on regulation of Fannie Mae and Freddie Mac, the two private, government-backed firms that provide a lion's share of mortgage financing, according to Howard.He said a much-needed element for turning around the housing industry would be a tax credit of perhaps $10,000 for buyers of a new home. This could be aimed at first-time buyers, or it could be more broadly based, Howard said. In some cases, the tax credit could be as much as $15,000.A similar step taken in 1975-1976, during the administration of President Gerald Ford, helped the country out of a recession at that time, he said. That tax credit was for $1,000. Howard spoke with members of the Tribune's editorial board, telling them that the housing industry is in a recession that is affecting all parts of the economy."Home building traditionally is the first sector to go into a recession, but it is also the first to come out," he said.The housing industry could recover before the end of 2008, provided that the rest of the economy doesn't tumble into a recession, Howard said. Currently, builders are faced with about 10 months worth of unsold homes."The housing downturn is affecting lumber mills and a wide range of manufacturers, and the situation for builders is dire," Howard said. Part of the problem, admittedly, was caused by overbuilding, he added.But additional blame should go to poor regulation of mortgage lenders, some of whom made predatory loans that have tumbled into foreclosure, Howard said. Additional blame should go to appraisers who overvalued properties, and mortgage brokers, who encouraged consumers to take inappopriate loans. As part of the current government stimulus plan, conforming loan limits for mortgages were raised above $417,000 for houses in California, Florida and other high-price areas. But the limit was unchanged for the Chicago area. That is hurting buyers who are looking at homes priced in a range of $500,000 or more, analysts said.Locally, sales of new homes have fallen by about two-thirds, "but by summer we will be through the worst of the situation here," said Peter Schwartz, chief executive officer of the Home Builders Association of Greater Chicago, who also attended the session.A harsh winter and late spring have hurt sales, he said, but builders are poised for a rebound.
The housing industry could see a turnaround before the end of this year, but only if Congress takes action beyond the current economic stimulus plan, and the credit markets stabilize, the head of the National Association of Home Builders said here Friday.Overhaul of federal agencies responsible for the housing industry has been on hold for five years, and action is needed quickly, said Jerry Howard, CEO of the builders' group."There has been a lot of finger-pointing, but action has been too slow," he said. "Current regulation has been dysfunctional and has been too slow to help the industry."Action is needed on an overhaul of the Federal Housing Authority and on regulation of Fannie Mae and Freddie Mac, the two private, government-backed firms that provide a lion's share of mortgage financing, according to Howard.He said a much-needed element for turning around the housing industry would be a tax credit of perhaps $10,000 for buyers of a new home. This could be aimed at first-time buyers, or it could be more broadly based, Howard said. In some cases, the tax credit could be as much as $15,000.A similar step taken in 1975-1976, during the administration of President Gerald Ford, helped the country out of a recession at that time, he said. That tax credit was for $1,000. Howard spoke with members of the Tribune's editorial board, telling them that the housing industry is in a recession that is affecting all parts of the economy."Home building traditionally is the first sector to go into a recession, but it is also the first to come out," he said.The housing industry could recover before the end of 2008, provided that the rest of the economy doesn't tumble into a recession, Howard said. Currently, builders are faced with about 10 months worth of unsold homes."The housing downturn is affecting lumber mills and a wide range of manufacturers, and the situation for builders is dire," Howard said. Part of the problem, admittedly, was caused by overbuilding, he added.But additional blame should go to poor regulation of mortgage lenders, some of whom made predatory loans that have tumbled into foreclosure, Howard said. Additional blame should go to appraisers who overvalued properties, and mortgage brokers, who encouraged consumers to take inappopriate loans. As part of the current government stimulus plan, conforming loan limits for mortgages were raised above $417,000 for houses in California, Florida and other high-price areas. But the limit was unchanged for the Chicago area. That is hurting buyers who are looking at homes priced in a range of $500,000 or more, analysts said.Locally, sales of new homes have fallen by about two-thirds, "but by summer we will be through the worst of the situation here," said Peter Schwartz, chief executive officer of the Home Builders Association of Greater Chicago, who also attended the session.A harsh winter and late spring have hurt sales, he said, but builders are poised for a rebound.
Thursday, November 1, 2007
Orlando New Home Market Gets Worse
Nov 1 - Orlando Sentinel Reports:
Home builders continued cutting back in the Orlando area this summer, as new-home starts plunged 47 percent in the third quarter compared with the same period a year ago.
MetroStudy, a Texas-based real-estate-research company, also said in its latest survey that the July-to-September home construction in Metropolitan Orlando was down 20 percent from the previous quarter.But the number of home buyers closing on their purchases, and moving into their new houses, in the four-county metro area slipped only 5 percent from the second to third quarters.
Economists and industry experts said the sharp drop in housing starts is painful in the near term but helpful in the long run because it means the inventory of unsold homes can be absorbed faster. It also means a rebound in the region's housing market might begin sooner, and perhaps be even stronger, than after previous downturns, they said."They are anxious to work their way through the inventory.
Now is not the time to be building," said Terry Eckert, a longtime Orlando-area home builder. Builders are smart enough to know the cyclical nature of the market, Eckert said, and most builders are not starting work on any homes unless it involves a confirmed sale with lender-approved buyer.
Eckert, a former president of the Home Builders Association of Metro Orlando, worked for years for major-production builders -- the companies that fill subdivisions rather than erecting custom homes on single sites. He recently became director of construction for Habitat for Humanity-Orlando, the charity that builds for families who ordinarily could not qualify for a regular home loan. In contrast to the area's conventional builders, Eckert's nonprofit group is on pace to build a record 17 single-family homes in the region by the end of its fiscal year next June 30.
But only the major commercial builders have the scale and financing to build homes in the volume required to meet overall demand, and the MetroStudy report released Wednesday showed that housing starts in the Orlando area during the third quarter fell 46.9 percent year-over-year to 4,851 units.Anthony Crocco, director of MetroStudy's Central and Northeast Florida divisions, said the sharp decline in Metro Orlando -- which comprises Orange, Seminole, Osceola and Lake counties -- is a reflection of "the slow sales paces and high cancellation rates of late summer and early fall." His survey of subdivisions showed that the number of homes sold and occupied in the third quarter totaled 3,850, down 29.8 percent from the same period in 2006 but off only 5 percent from this year's second quarter.
Orlando economist Hank Fishkind told builders, developers and Realtors last week that this housing downturn does appear to be different in Central Florida when compared with past housing slumps, in that home builders have slammed on the brakes harder than ever.That should help clear out the inventory of unsold homes and set the stage for a more robust rebound in sales of both new and used homes, perhaps in 2009, Fishkind said during his quarterly forecast for Stirling Sotheby's International Realty Global Gallery.
MetroStudy's report did, in fact, show a drop in the area's new-home inventory. Total inventory -- homes under construction, finished-but-vacant units and model homes -- totaled 10,412 at the end of the quarter, down 36.3 percent from a year earlier.But at the recent slow sales pace, that still amounted to a 6.6-month supply. And the critical finished-but-vacant category fell just 9.9 percent from a year ago, to 5,264 homes -- still, a sign that the large stockpile of homes is finally starting to get whittled down.
Home builders continued cutting back in the Orlando area this summer, as new-home starts plunged 47 percent in the third quarter compared with the same period a year ago.
MetroStudy, a Texas-based real-estate-research company, also said in its latest survey that the July-to-September home construction in Metropolitan Orlando was down 20 percent from the previous quarter.But the number of home buyers closing on their purchases, and moving into their new houses, in the four-county metro area slipped only 5 percent from the second to third quarters.
Economists and industry experts said the sharp drop in housing starts is painful in the near term but helpful in the long run because it means the inventory of unsold homes can be absorbed faster. It also means a rebound in the region's housing market might begin sooner, and perhaps be even stronger, than after previous downturns, they said."They are anxious to work their way through the inventory.
Now is not the time to be building," said Terry Eckert, a longtime Orlando-area home builder. Builders are smart enough to know the cyclical nature of the market, Eckert said, and most builders are not starting work on any homes unless it involves a confirmed sale with lender-approved buyer.
Eckert, a former president of the Home Builders Association of Metro Orlando, worked for years for major-production builders -- the companies that fill subdivisions rather than erecting custom homes on single sites. He recently became director of construction for Habitat for Humanity-Orlando, the charity that builds for families who ordinarily could not qualify for a regular home loan. In contrast to the area's conventional builders, Eckert's nonprofit group is on pace to build a record 17 single-family homes in the region by the end of its fiscal year next June 30.
But only the major commercial builders have the scale and financing to build homes in the volume required to meet overall demand, and the MetroStudy report released Wednesday showed that housing starts in the Orlando area during the third quarter fell 46.9 percent year-over-year to 4,851 units.Anthony Crocco, director of MetroStudy's Central and Northeast Florida divisions, said the sharp decline in Metro Orlando -- which comprises Orange, Seminole, Osceola and Lake counties -- is a reflection of "the slow sales paces and high cancellation rates of late summer and early fall." His survey of subdivisions showed that the number of homes sold and occupied in the third quarter totaled 3,850, down 29.8 percent from the same period in 2006 but off only 5 percent from this year's second quarter.
Orlando economist Hank Fishkind told builders, developers and Realtors last week that this housing downturn does appear to be different in Central Florida when compared with past housing slumps, in that home builders have slammed on the brakes harder than ever.That should help clear out the inventory of unsold homes and set the stage for a more robust rebound in sales of both new and used homes, perhaps in 2009, Fishkind said during his quarterly forecast for Stirling Sotheby's International Realty Global Gallery.
MetroStudy's report did, in fact, show a drop in the area's new-home inventory. Total inventory -- homes under construction, finished-but-vacant units and model homes -- totaled 10,412 at the end of the quarter, down 36.3 percent from a year earlier.But at the recent slow sales pace, that still amounted to a 6.6-month supply. And the critical finished-but-vacant category fell just 9.9 percent from a year ago, to 5,264 homes -- still, a sign that the large stockpile of homes is finally starting to get whittled down.
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