Developer Defaults & Foreclosures Hammering Bakersfield; Leaving Taxes Unpaid, Subs Stiffed

In California, The Bakersfield Californian reports:

• Through their living room window in a new Wasco subdivision, the Villalobos family can see tumbleweeds almost tall enough to ring a doorbell clog the entryway of an unfinished home across the street. “It’s sad that we got stuck here,” said Carlen Villalobos, 25, of the house she and her husband bought last fall in Hidden Grove, a tract off Palm Avenue north of Highway 46. They live in one of eight homes completed before Sacramento developer Reynen & Bardis Communities Inc. halted construction here late last year, leaving idle partially constructed houses on many of the cul-de-sac’s dirt lots.

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• Reynen & Bardis is among a dozen or so developers who have defaulted on Kern projects carrying loans of $2 million or more, according to an ongoing Californian survey. The largest so far is SunCal Cos.’ default on $74 million borrowed from Lennar Corp. against 515 acres in Shafter; the property foreclosed Wednesday. It’s the first time metropolitan Bakersfield has seen such a spike in developer defaults and foreclosures, real estate professionals say, and it’s unclear what the final impact will be. In the meantime, the resulting pinch goes beyond banks. Some companies aren’t paying contractors, liens indicate, and are letting property taxes slide.

For more, see LEFT HANGING (Sacramento developer's projects sit unfinished as it deals with financial trouble).