You know things are bad when it makes more sense for banks to demolish foreclosed homes than to keep them. In the case of the Texas bank who destroyed 16 homes in Victorville California, the homes were not yet finished, but the loss the bank is taking on these has to be outrageous regardless. For more on this, read the following blog post from Tim Iacono.
The story about a Texas bank deciding to demolishing foreclosed homes in California was everywhere yesterday, but it shouldn't be that surprising - they needed a lot of work.
When they start bulldozing finished houses into the ground because they just can't sell them, then that will be real news.
Some details are provided in this report at the Wall Street Journal:
A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.We've driven through that area many times on the way from Southern California to Las Vegas, a few times when the bubble was at its peak, and almost every time we wondered why anyone would ever pay $300,000 or more to live in Victorville.
Guaranty Bank of Austin is wrecking the structures to provide a "safe environment" for neighbors of the abandoned housing tract in Victorville, a high-desert city about 85 miles northeast of Los Angeles, a bank spokesman said.
Victorville city officials said the bank told them the cost of finishing the development would exceed what they could sell the homes for.
The bank also faced escalating city fines as vandals and squatters took over the sprawling housing project, leaving behind graffiti and drug paraphernalia, city officials said.
"It's unfortunate," said George Duran, the city's code-enforcement manager. "We would have hoped for these houses to be finished. But it's up to the owner to see what is best for them."
There's also a related story in the LA Times.
This post can also be viewed on themessthatgreenspanmade.blogspot.com.