More than 300 homesites in six Santa Rosa subdivisions remain vacant three years after construction began, reminders of the housing industry's steep economic tumble.
Most were locally owned projects that stalled once builders ran out of cash. Now the landscape may be changing as national players enter the market and pick up where the locals left off.
This month, two national companies purchased home sites in subdivisions south of the Sonoma County Fairgrounds that once were owned by Christopherson Homes.
Miami-based Lennar Homes, the nation's third-largest home builder, already is advertising sales in the Linwood Village subdivision.
The company acquired 77 home sites and 21 partially completed townhomes and single-family houses in a court-ordered sale. The lender, Bank of the West, had sought to recoup $12.7 million; Lennar paid $7million.
And in another sign that national companies see potential in Santa Rosa's long-dormant housing market, Scottsdale, Ariz.-based Meritage Homes has purchased in a foreclosure sale 66 home sites in the Dauenhauer Ranch subdivision near Linwood Village.
The land is ready for construction, with retaining walls, streets and street lights already in place.
Public documents show that lender Wells Fargo was owed $22 million; Meritage paid $12million. The company has not yet announced its plans.
These subdivisions were conceived before there were signs of the coming economic crisis. Sonoma County's home prices peaked in August 2006, and then fell 50 percent by Feb. 2009. Builders like Christopherson were left to watch their potential profits vanish.
"It just got uglier and uglier to the point where you were just throwing money down a black hole," said Ross Liscum, broker/owner of Prudential California Realty in Santa Rosa.
National companies have bought unfinished subdivisions in many communities, said Greg Paquin, president of The Gregory Group, a new home research and consulting firm in Folsom.
The public companies and some of the large private ones have access to the large funds needed for such purchases, "and they're willing to pay cash for good deals," he said.
Even in a market slump, the land retains some value because it remains such a key component of home construction, Paquin said. "When the market improves, those lots will be built on very quickly."
Keith Woods, chief executive officer of the North Coast Builders Exchange in Santa Rosa, said the county's housing industry still has to work through "a crisis" of depressed prices caused by too many foreclosures and other distressed properties for sale. But eventually home prices will rise and companies like Lennar will benefit from their home site purchases.
"They've got staying power, and this is a very smart move to have these ready when the market does turn around," Woods said.
Chris Peterson, president and a co-owner of Rivendale Homes of Santa Rosa, said his company owns 52 home sites at its Avignon subdivision at San Miguel and Fulton roads. The owners plan to hold on to the lots until the housing market improves enough to resume construction.
"We're patient people, so we're going to sit and wait for the next couple of years," Peterson said.
Researcher Teresa Meikle contributed to this report. You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@
pressdemocrat.com.
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