New Homes Face World War III

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.
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.

Home prices in San Bernardino County, where Victorville is located, have fallen 60% from the housing peak in 2006, according to DataQuick, a research firm. The median new-home price in Victorville is $265,990, according to Hanley Wood Market Intelligence, a housing-research firm. Homes in the Victorville development were priced at a range of $280,00 to $350,000 in early 2008.

Four of the 16 structures slated for demolition were “substantially complete,” while the others were less than half finished and “exposed to the elements.” Guaranty obtained the property through foreclosure in December 2008. The builder was Matthews Homes.

A demolition job of this size would likely cost more than $100,000, according to a person familiar with the matter. A video of the houses being knocked down was posted on YouTube by the founder of a Web site called Vision Victory Manifesto, which has been warning of economic disaster.