Housing market decline forces some big builders to sell land bought during boom

Housing market decline forces some big builders to sell land bought during boom
By Mike Freeman

May 13, 2007

Near the peak of San Diego’s housing boom, home builder D.R. Horton purchased a steep, nine-acre hillside along Friars Road across from Fashion Valley mall for $22 million.

The land was earmarked for Fashion Walk, a trendy, 161-unit condo project. D.R. Horton spent $1.5 million on a 46-foot-high retaining wall to hold back the slope. The company graded a flat shelf for the condos, hauling away tons of dirt. It poured concrete foundations for elevator shafts.

But this March, D.R. Horton walked. It sold the property to apartment developer AvalonBay of Newport Beach. The price: $19.2 million. D.R. Horton, one of the nation’s largest home builders, is not the only one shedding land purchased during San Diego’s housing heyday. Other builders are selling once-coveted parcels given the current strains in the housing market, ranging from anemic sales to rising mortgage defaults to tightening lending standards.

At San Elijo Hills, a 3,463-home subdivision in San Marcos, four home builders under contract to purchase 257 single-family lots passed on the deals, forfeiting deposits totaling $12.6 million, according to filings with securities regulators from HomeFed Corp., the developer of San Elijo. HomeFed officials did not return phone calls for comment. According to the filing, the company would have received $116.5 million – or $453,300 for each lot – if home builders had gone ahead with the deals. READ ENTIRE UT ARTICLE

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