COMMENT OF THE DAY: INVENTING THE HEIGHTS TEARDOWN “Correction– The tearing down of old homes to build new was pioneered by Sterling Victorian Homes in the mid-late 1980s. It began on the 400 block of 22nd Street. These homes look very modest by today’s standards. It is likely true that Allegro pioneered the building of Disney-fied Hummer homes with cheese closets…” [Sheila, commenting on Scaling Back the Upscale: Allegro Builders, Downtempo]
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Homebuilders
Allegro Builders president and CEO Lambert Arceneaux has no more employees to let go from his company, and has had problems paying his subcontractors, a source tells Swamplot. Starting way back in the olden days of a dozen years ago, Arceneaux pioneered the concept of tearing down tired old Sears catalog homes and single-bathroom working-class bungalows in the Heights and replacing them with high-dollar luxury homes in Victorian dressing. After proving to other builders that land banking and upscaling the Heights could be a lucrative business, Allegro eventually stretched its repertoire to million-dollar-plus whirlpool- and wine-cellar-enshrined fantasies that mimicked a variety of regional historical styles.
Our source says Allegro’s project manager was let go a couple of weeks ago — and that “there’s no money coming in.”
Allegro also developed two small but high-profile mixed-use buildings on Studewood. One is now known as the home of Bedford Restaurant. An earlier effort across 10th St., which houses Lance Fegen’s Glass Wall restaurant and Allegro Builders’ offices upstairs, is shown here in a rare early photo — minus its usual tight single-wythe street wall of valet-parked SUVs:
Nancy Sarnoff chronicles the decline of Houston homebuilder David Powers Homes:
David Powers Homes has moved out of its offices on Westheimer and the Beltway and is now operating out of a model home in Lakes of Bella Terra, a subdivision in Richmond.
The company’s staff — 120 people at its peak — has dwindled to just four or five.
The high-end builder is now trying to finish the 36 homes it has in various stages of construction. . . .
Given the company’s higher home prices, about 50 percent of its customers financed their purchases with two loans to keep from paying higher interest rates on jumbo loans.
Those are loans that exceed $417,000.
Many of those second mortgages, Powers said, were subprime.
- Recession takes its toll on another builder [Houston Chronicle, via Swamplot inbox]
Image: David Powers Homes
NO MORE JIM WALTER HOMES It’s too late to buy a home in Houston from Jim Walter Homes — though the company website reports orders are still being taken for new homes in Houma, Louisiana. Parent company Walter Industries, based in Florida, is getting out of the homebuilding business. Jim Walter Homes had not been profitable “for several years”: “. . . the business, once known for its flash construction, caught a reputation for moving at a snail’s pace. Walter Industries decided to close the dwindling homes leg and work toward becoming a focused natural resources and energy business — a greater value to shareholders, [communications director Michael] Monahan said.” [St. Petersburg Times; website]
So where are all the half-built homes? That question, asked by a Swamplot reader last week, prompted a slew of comments from other readers eager to identify pockets and neighborhoods in and around Houston where construction has come to a halt because of problems connected to the nationwide housing-market collapse. (As well as a few where construction stopped for reasons of a more local nature.)
Swamplot reader subprimelandguy suggested looking at Northwest Houston:
You need to go to the suburban areas, particularly the non master planned communities between the Beltway and Highway 6 / 1960. The most aggressive one is actually inside the Beltway near West Road and Gessner – a former Royce Homes (go figure) development called Westwood Gardens. It is a bombed out poster child for the subprime fiasco.
Then late yesterday, subprimelandguy sent in photos!
ANOTHER HOMEBUILDER CALLING IT QUITS Kimball Homes, based in suburban Chicago, is shutting down. The company has built homes in markets all over the country, including in 4 Texas cities: “A spokeswoman said more than half of the company’s workers were laid off Tuesday, including an undisclosed number in the Houston area, where the company was active in 11 communities in the western and northwestern suburbs, Spring, the Humble area and Friendswood. Kimball Hill had 704 closings in the Houston area in 2007, down from 903 closings in 2006, according to Metrostudy.” The company filed for Chapter 11 bankruptcy in April. (The Chicago Tribune reports Kimball Hill had 1,100 employees as recently as last year.) [Houston Chronicle, via Swamplot inbox]
THE FEDEX IRVINGTON SITE GOES TO AVENUE CDC Avenue Community Development Corp. will be working with the Houston Housing Finance Corp. to build 80 to 100 homes and 180 to 250 apartments on the site of a former FedEx facility it bought near Moody Park. “The redevelopment of the 20-acre tract at 4004 Irvington Blvd., just south of Calvacade Street, is the nonprofit organization’s biggest to date, according to Avenue CDC. . . . Construction will begin in 2009.” [Houston Business Journal]
PALLADIAN MCMANSIONS AND YOU “The next time you feel the urge to lament how a freshly built stucco McMansion has replaced two cozy bungalows down the street, consider this: You may be at the intersection where old meets new and bearing witness, as generations past have, to a longstanding battle of urban and rural ideals. At least, that’s one part of the equation, according to University of Houston assistant professor Michelangelo Sabatino. . . . ‘In the suburbs, homeowners aspire to show off verdant lawns as symbols of success. The lawn recalls the agrarian past of the country,’ he says. ‘And yet, if one looks closer, it is more of a simulacrum – just a representation – of this past. Few really want to actually grow vegetables, and few, especially in Texas, seem to want to hang out on the lawn or on porches, preferring the cool of their air-conditioned homes.’ . . . The paradox of today’s McMansion craze – many of them inspired by Palladian motifs, such as symmetry and classical ornament on their facades – is that they don’t reflect the values that originally inspired them, Sabatino says. In a way, this underscores that history is never stagnant, he says, yet it also illustrates that the builders and buyers aren’t really aware of what values inspired [Andrea] Palladio’s architecture. ‘In some cases, Palladio’s legacy has been reduced to mere “style.‒†[dBusiness News]
The attorney for Lakes of Avalon Village developer Robert A. Hudson is now saying that economic conditions make it “unlikely” that Lennar Homes and J. Patrick Homes will build on homesites in the path of a new proposed route for Segment F2 of the Grand Parkway in Spring.
But there’s no need to give up hope entirely: Lennar and J. Patrick apparently encountered few difficulties building and selling 60 homes sitting on the new highway’s earlier proposed route, in a different portion of the same subdivision. The developer’s stated reluctance to repeat the trick means the homebuilding market must be pretty tough now.
The new route would swing around the homes that have already been built and into not-yet-developed areas of Lakes of Avalon Village and neighboring Willow Trace.
What’s a failed homebuilder to do when it hurriedly goes belly-up . . . but still has a huge chunk of inventory on hand?
Welcome to the Royce Builders Already-Gone-Out-of-Business Home Sale!
How’s it work? Well, if you’re a lucky real-estate agent, you receive a mysterious message with a couple of attachments listing the more than 300 homes in the Greater Houston area the . . . uh, former company still has available! In 49 different neighborhoods around town! And all at discount prices!
Included with the list: a map of the neighborhoods Royce graced (shown above), demonstrating the company’s vast exurban spread.
Of course, the email message doesn’t come from Royce Builders, because Royce is . . . no longer with us. (And, to judge from the comments coming into Swamplot from recent Royce buyers, employees, and vendors, it is sorely missed!) The list comes instead from an email address on the h-smith.com domain. That hyphen, of course, stands for “ammer.” Didn’t Hammersmith Financial, Royce’s sister mortgage company, also go out of business?
But the property list is so much more fun than a collection of random way-far-out addresses:
From the website of Top View Builder — builders of this 6,017-sq.-ft. home at 5607 Whitehaven St. in Bellaire — under “Company History”:
Founded in 2007 by four well-rounded partners, the company is desitned to set the benchmark of excellence.
Maybe helps explain the bloated look, too.
- About us [Top View Builder, via Swamplot inbox]
- 5607 Whitehaven St., Bellaire [HAR]
What’s this 15,811-sq.-ft. home in Cypress doing on the market . . . for a fat $9.8 million?
Looks like the seller might be needing to do a little downsizing!
A couple of tipsters are telling us that Royce Builders is back in business, only a little more than a week after shutting everything down! Members of the Speer family, say our sources, have started up a new company with about 10 employees in the same Royce Builders building on Beltway 8, in the space formerly occupied by Royce’s sister company, Hammersmith Financial.
Even more fascinating is the name of the new company, which one of our sources says is Vestalia. If that’s true, it’s a terrific choice! In ancient Roman mythology, Vesta was the virgin goddess of hearth and home. How appropriate!
Well, sort of. Vestalia is actually the name of a holiday that celebrated Vesta. Wikipedia provides the . . . uh, gory details:
On the first day of the festivities the penus Vestae (the curtained sanctum sanctorum of her temple) was opened, for the only time during the year, for women to offer sacrifices in. Such sacrifices included the removal of an unborn calf from a pregnant cow.
Can’t wait to hear what sort of business this new company will be!
- Vestalia [Wikipedia]
- Previously in Swamplot: Royce Builders: It’s All Over But the Refunds, Staff and Paperwork Reduction at Royce Builders and Hammersmith Financial, Royce Builders Watch, The Real Reason Royce Builders Home Sales Were in the Toilet, Royce Builders: So Hard To Say Goodbye, Royce Builders Sales Staff Update: Never Mind the Rumors, Sell Sell Sell!, Royce Builders Death Spiral: Juicy Details!, We Have Layoffs: Heads Roll at Royce Builders, The Rumors Circling Around Royce Builders
Royce Builders has finally shut down. The company slipped out somewhere between gusts of Hurricane Ike, leaving only a note on its website.
Looking for an earnest money refund? Try Royce’s handy new sounds-like-spam Gmail address! But do it before October 1, because . . . well, just because.
Got a home warranty issue? Well then, just . . . read the warranty!
A reader comments:
My concern is for the people who closed on one of their poorly built homes in the last 365 days. Royce was the backer of the new home warranty for the first year of ownership and now they are gone. My friends who used to work for them tell me there are thousands of unfinished warranty requests that were never completed or even addressed. I wish all the home owners good luck on getting things fixed. At least they will have the Two to Ten Waranty beginning in the second year (if Royce paid the premium).
Royce’s happy farewell message is after the jump!
[youtube:http://www.youtube.com/watch?v=8Pf-c5jVm1g 400 330]
Pay no attention to that dying possum by the side of the road! Lou Minatti takes a bike ride through a neighborhood of new Royce and Centex homes in Katy and finds lots of building going on — and plenty of “sold” signs!!! But . . . is anybody actually living here? And uh, some of those signs look awfully familiar — from a ride through this same area back in May.
After the jump: some of the same scenes, 4 months ago!