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I
just handed in a manuscript for a new book which contains the following
sentence:
"The
image of McMansion ghost towns, once the wishful thinking of a tiny
anticapitalist fringe, is suddenly a little too close for comfort."
I've
been worrying that the "ghost town" reference was a little too
extreme. But today's Wall
Street Journal dispelled that fear with a front page article
that's full, from title to concluding paragraph, of extreme housing bust
imagery. Some excerpts:
After the Bubble, Ghost Towns Across
America
...Since real-estate tanked,
many new planned communities across the country are half-empty, with for-sale
signs outnumbering residents by a large margin. Daily life in these
developments seems a bit post-cataclysmic. Children play on elaborate but
empty playgrounds. They walk their dogs past rows of shiny houses that have
never been lived in. Voices echo up and down the block. Unfinished houses and
vacant lots strewn with construction debris clutter the horizon.
Robert Waltenspiel lives with
his wife and two daughters in a unfinished subdivision in Auburn Hills, Mich.
Standing in front of his house, he can see more than 30 weed-choked lots
where new houses were supposed to go. The developer halted construction more
than two years ago. "As far as working on my yard and saying, 'Hey,
neighbor, want a beer?,' that's not going to happen," says Mr.
Waltenspiel, an account manager for Hewlett-Packard Co. The hot tub at the
community center doesn't work. The communal fountains are dry. Mr.
Waltenspiel's kids have no one in the subdivision to play with, so he has to
take them to a nearby park for social interaction. His 4-year-old "will
walk up to strange girls in the park and say, 'Hey, will you be my friend?' "
he says. "A, it's adorable. B, it's sad."
In the past year, roughly 15%
to 20% of residential developers have gone out of business, suspended
operations or changed their line of work, according to an estimate by the
National Association of Home Builders. The people who bought into these
subdivisions encounter all sorts of other unexpected problems, including
burglars looking to steal toilets, appliances and copper wiring. And blight.
Krista Anderson, an administrative assistant, lives in a subdivision outside
Phoenix where the developer suddenly halted construction last fall, leaving
behind not just unfinished houses but also scaffolding, piles of cement and
construction material that "is turning yellow and looks bad."
Many residents aren't sure
exactly who is in charge of mowing the weeds, maintaining the street lights,
cleaning up when someone uses open space as a dump. Some residents form
especially tight bonds with neighbors 10 or 20 doors down the street. Others
relish the peace and quiet.
"With my art and my books,
I don't need to go outside," says Miriam Ramirez, who lives with her
husband, a retired doctor, in a stalled subdivision in suburban Atlanta.
"But not everybody's like that."
Her subdivision, Woodbridge
Crossing in Smyrna, 15 miles from downtown Atlanta, was supposed to consist
of several hundred garden-style houses. Instead, she lives on a street where
most of the roughly 30 units have never been lived in. It's the only
inhabited street. Paved roads surround acres of empty lots. At night, she
says, Woodbridge Crossing can feel a bit like "a cemetery." One
plus: She usually has the community swimming pool to herself.
...Now, many of the region's
new subdivisions, with houses that can't be rented, much less sold, are
forlorn monuments to disastrous real-estate forecasting. A subdivision called
Tuscany, five miles west of Bentonville, was envisioned as an enclave of
luxury homes with landscaping meant to evoke an old-world Italian village.
Developers installed an enormous hand-built stone wall surrounding several
hundred acres of what had been cow pasture. So far, only five houses have
been built, and just two sold.
Carol Trees, who paid $570,000
for a 4,800-square-foot house six months ago, admits the solitude is a bit
disconcerting. The good news is that her three children have the run of a
pasture longer than several football fields. "We love it right
now," says Mrs. Trees, a nurse practitioner. "We sit on our back
porch and fantasize that we own all this land."
...The last seven months have
been an odd existence. Chickens wander by from a nearby farm, poking around
in the brush. Not long ago, someone broke into one of the unoccupied houses
around the corner. Now the Pfluegers say they pay close attention to passing
traffic, but hardly anybody passes by.
"There's just no noise," Mrs. Pflueger
said.
John Rubino
DollarCollapse.com
John Rubino is co-author, with GoldMoneys James Turk, of The Coming Collapse of the Dollar and How
to Profit From It (Doubleday, December 2004), and author of How to Profit from the Coming Real Estate
Bust (Rodale, 2003) and Main
Street, Not Wall Street (Morrow, 1998). After earning a Finance MBA
from New York University, he spent the 1980s on Wall
Street, as a Eurodollar trader, equity analyst and junk bond analyst. During
the 1990s he was a featured columnist with TheStreet.com and a frequent
contributor to Individual Investor, Online Investor, and Consumers Digest,
among many other publications. He now writes for Fidelity Magazine, CFA, and
Proto.
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