Suburban Ghost Towns

Nice, short read on Houston Tommorrow Growth News today…

Foreclosures and bankrupt developers are leaving vacant lots and homes in their path
Stories about half-built subdivisions left largely empty due to the collapse of the home financing market are increasing in numbers as the broader economic crisis sets in, and even what was once “prime property” is now considered unsellable.

In a recent Seattle times column, Danny Westneat says these “unwanted subdivisions are our modern-day ghost towns.” He covers a story in Skamania County Washington, where two new subdivision projects for luxury homes along the Columbia Gorge have gone bankrupt about a third of the way into the building process, with 51 lots out of 73 planned now in foreclosure, and no new buyers in sight.

NPR reports on a similar situation in the half-built development of New Daleville, a distant suburb of Philadelphia, where the originally more upscale home building plans have been altered, using cheaper materials to make homes more affordable. Plans for nearby retail development for the essentially rural New Daleville community are apparently stalled, and financially-strapped homeowners are facing higher sewer and propane heating costs due to their exurban location, says the NPR story.

An article in the Galesburg, IL Register-Mail notes that planned suburban communities all over the country, from Southern California, to Michigan, to Northwest Arkansas are turning into “ghost towns,” and points to “disastrous real-estate forecasting” and extreme overdevelopment as the primary causes. Derelict, overgrown lots, construction debris, and empty homes subject to burglaries for things like toilets and copper wiring have become a problem in some of these communities, says the article.

I think this kind of stuff is about to get a lot more real… we’re really only seeing the tip of the iceberg. Right now a lot of people are selling in distress because they’ve run out of money. It’ll be interesting to see if people start to sell out of panic because of how upside-down they are in their mortgage. The lower these home values dip the more people are tempted to walk away and let the bank take the home in foreclosure. It sounds radical, but when the neighbors start moving out or are evicted, who wants to live in a ghost town?

We’ll see what happens…