Why are they still pumping out homes when there's a glut and no buyers? Idiots. ========================== Home builders from Florida to Texas are railing against the Federal Deposit Insurance Corp., saying the agency is cutting off construction financing from seized banks and demanding early repayment of current loans. The FDIC, which has become a leading advocate for modifying mortgages of financially strapped homeowners, isn't extending that same tolerance to the housing industry, the builders said. "They can do anything they want," said Earl Snyder, president of Snyder Construction Co. in Englewood, Fla., whose construction lender, Freedom Bank, was taken over by the FDIC on Halloween. Four days later, Mr. Snyder met with FDIC officials, and was told that he had 60 days to pay off his $2 million construction loan and he couldn't draw additional cash to finish 10 houses that he is building in southwest Florida. "I felt like a criminal and I had done something wrong," said Mr. Snyder. An FDIC spokesman said that construction loans tend to be "problematic" and the "FDIC must take into consideration what is in the best interest of the creditors of the failed banks."
Since these homes are in warm-weather states during Winter, people can "squat" in them and not freeze to death.
They are not idiots, builders build, that's what they do. The Empire State Building sat empty for years while the economy languished during the depression. An unfinished subdivision, shells of homes without windows, left open to the elements is not going to preserve what is already invested. The first order of business for banks is to finish what was started rather than start new initiatives to get the economy going. Everyone is concerned to preserve paper assets while hard assets are deteriorating. But wtfdik.
Why not build when things are cheaper? Builders that have been around a while and have liquid cash can afford to buy cheaper land at these prices. I'm sure some non-union contractors are willing to do the job for cheaper these days as well. May as well build and just sit on it. They'll get a better ROI when things finally turn around. Also, you do realize that there are a few parts of the country where real estate hasn't plunged. There are areas in Texas and Georgia that are still doing okay.
Fwiw, I recognize parallels between the 1906 San Fran earthquake and the importance of lending and the criteria for rebuilding the area. Granted we don't have physical destruction but there are some methods re banking that could be applied to get things moving. Imo, there are great profit opportunities to be made in lending in this enviroment. http://www.sfmuseum.org/1906/rebuild.html
That's because you did you stupid fcuk. You were inept as a businessman and didn't plan for the ebb-and-flow of the market. Your current situation is the direct consequence of your ineptitude, and is the punishment for your crime. Learn from it.
lol. Mr Synder should have been tuned in to CNBC instead of whacking nails into boards. I wonder how many suppliers are going to get shafted on that call? What a bunch of dummies, those vendors who sold him the s/r and lumber, they should have known better. And those stupid employees working for all of the above, they should have jumped ship and quit, working for a inept losers business.
I grew up in construction and I've noticed this always happens. When housing is booming everybody becomes a builder and the established builders ramp up operations and start living like millionaires. I've seen the cycle repeat itself several times in my life, on a local scale but the principles are the same. People are people and are their actions are predictable. I've seen quite a few builders get rich and then when business slows go broke. I've known some old timers who are all dead now and their stories are the same. I sold real estate back in the early 80's and it was happening then too. My broker at the time used to be a builder I think in the 60's and he told the story about when the bottom fell out of the market and he was stuck with 123 homes when nothing was selling. A lot of inventory for a one man operation. When this is over it will happen again. The main difference now is that it is nation wide.