From the Phoenix Business Journal:
Fulton Homes Corp. filed for Chapter 11 bankruptcy reorganization Tuesday.
“It is confirmed,” said Rosaria Glasco of Knoodle Shop, the home builder’s public relations firm. “Fulton Homes Corp. filed for Chapter 11 protection today this morning. This does not affect home warranties or customer service.”
“Back in the day” (of the real estate boom — you know, way back in 2005 / 2006) builders in Phoenix went nuts. And they over-built in this writers humble opinion.
Now they are facing the consequences of over-building and a depressed real estate market.
Fulton Homes was big around here. They are “restructuring”, not going away, but this is still a big deal.
I suspect that they won’t be the last home builder to hit the bankruptcy courts…
More from the Mainstream Media:
ABC15 – Major Arizona home builder files for Chapter 11 bankruptcy
KTAR – Fulton Homes files for Chap. 11
East Valley Tribune – Fulton assures homeowners after bankruptcy
AZ Republic – Customers can relax, Fulton’s Chief says
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Jim, I think I visited a by Fulton project in Maricopa. I went to a D.R Horton community very close to the casino. My question is (and please forgive me if readers read this)…but did the obvious smell of cow dung deter buyers from building there? I just remember the stench and I couldn’t deal with that. Are communities over there suffering more than other areas? I’ve always wondered.
**Scott Allan´s last blog post..Jan 28 Fed meeting & Rates
I surprised to hear of the filing. I hope that it will allow them to get reorganized and come out healthy.
Aloha,
Keahi
**Keahi Pelayo´s last blog post..View Honolulu House $815,000
I agree that we will see even more builders in need of bankruptcy protection, possibly even a major nationwide builder. The “easy money” was just too good for them to not continue building until they were forced to stop. We moved From Phoenix to Austin amidst the housing boom in 2004 and became a Realtor. Austin didn’t experience a major boom like other cities did, and as a result, prices here are stable compared to cities like Phoenix. I enjoy reading your blog posts — keep up the great work!
The same thing is happening in Bend. During the boom, builders from all over moved into Bend. They built, and built, and built. Now there are subdivisions half finished, (or some with only 1 or 2 houses built). I hope we learn from this boom. Our city and county governments need to keep things under control. Just because the city is booming doesn’t mean that you have to allow hundreds of new building permits to be issued each month. Put a cap on it and hold your ground.
yea definatly there will be more builders going under. I dont think we have seen anything yet.
@Scott – there are many areas in Phoenix metro that can get a bit odorous. They come (primarily) from dairy farms — of which there are many, particularly in outlying areas like Maricopa.
But they are becoming fewer and fewer as they are plowed under for development.
@everybody else, thanks for your comments! The health of many developers, particularly smaller local ones, will be interesting to watch…
I guess everyone has their nuisances. Up here in New Jersey, I am 3 miles from the Meadowlands (Giants Stadium) where there are landfills and swamps. We don’t get our nickname as the “armpit of America” for nothing!
**Scott Allan´s last blog post..Explanation of Sub-Prime Crash
I do not mean to be insensitive, but I would rather see a company file bankrupcy than get bailed out. What will happen is the companies that are making prudent business decisions will rise to the top and be rewarded for the decisions they made responsibly.
Of course, when government starts giving away money, who knows where it’s going to go anyway. But that’s another blog entry!
**Colleen´s last blog post..What Is “Bacn?”
I love to make an example of Continental Airlines. They filed Chapter 11 BK TWICE!! Now, they are one of the strongest airlines out there and going strong. It all has to do with proper management. Apple Corp. will never, IMO, go BK because of its strong leadership. Anyway, Cont. Air did not get a bailout. They made adjustments, put the pedal to the medal and moved on. I fly them all the time because of it.
**Scott Allan´s last blog post..Is NOW Time To Buy?
I have been seeing this a lot where I live as well. There are several developments that builders started working on, but then never finished, which results in a few houses in the middle of a muddy construction site.
I agree with Colleen above that I think them filing bankruptcy is much better than getting a bailout.
I would not be surprised if this thing stretches out to see some of the big guys of the new construction home business heading for the protection of bankruptcy.
**James Boyer´s last blog post..Morris County New Jersey School Closings
Ira Fulton is one of the good guys.
Criticizing Arizona homebuilders is a bit of a hobby horse on my blog but I respect Fulton Homes. Their sales reps have always treated me well when I walked in with a client.
More importantly, Ira Fulton is a huge philanthropist. He donated a fortune to the ASU College of Engineering, now the Fulton School of Engineering. That’s money he may wish he had back now.
One of his foundations gives grants to undergraduate students to do research. Full disclosure; my older son received one of those grants and is working about 15 hours a week at the Biodesign Institute on some nanotechnology thing to diagnose diseases earlier (which allows for earlier treatment and better outcomes).
I wish Ira Fulton the best.
**John Wake´s last blog post..Phoenix home appreciation/depreciation by price range
Hi Jay,
Times are tough for new home builders here in Denver as well. In the past new construction sales was a large percentage of both my own production as well as that of my team members. In fact since a few of us have previously worked as sales consultants for builders around Denver, for years we marketed ourselves as new construction experts. Now days we barely mention that skill set at all since it so infrequently applies to our Buyers needs… In the past few months we have lost both Centex and Beazer home builders from the Denver market and virtually all other builders continue to struggle. Our Buyer clients benefit from huge incentives though! Virtually all of the builders have reduced prices and offer further reductions ranging from 2% up to 5% for “seasoned” inventory.
I have a new luxury loft in LODO (lower downtown) Denver that I am marketing at $300,000 less than I initially planned to sell it for!
-Bob
**Bob Maiocco in Denver Real Estate´s last blog post..Denver Luxury Homes in the Mountains of Golden
@John – I agree that Ira Fulton is one of the good guys. No one an argue about the Fulton’s philanthropic good deeds.
I have a feeling that he wouldn’t take that money back, even if he could.
Builders here in Wisconsin are caught in the Real Estate down turn also. The mistake these builders made was building homes only 1% of the population can afford. These builders all got caught up in the gold rush. Great Management earns a profit when times are tough.
That is a shame, but I have to agree that over building for incomes higher than most people made was the problem.
**Linda Craft-Raleigh Realtor´s last blog post..Raleigh Homeowners Struggling With Their Real Estate Investment
It is so sad to hear of good companies and good people having to file; it sounds like Ira Fulton was a really great guy in the community and I hope he is able to pull through
Well, whatever the reason may be, yes the economy stinks, but I agree that Ira wouldn’t take the money back either. Hopefully they re-do their loans and come out standing
**scott´s last blog post..Bloomfield NJ Real Estate
Phoenix builders are not alone, we’re seeing legacy builders in Atlanta that have been around for years facing bankruptcy and some completely closing. There is still a tremendous amount of new construction inventory that has to sell before we see improvement.
**Tina Fountain´s last blog post..1513 Jones Road – Roswell Luxury Home
Crazy the amount of business’ going belly up these days. Let’s hope it starts to turn around quickly.
Sharon
Fulton Homes is a great builder; I purchased one in Maricopa and had a great experience from ground breaking to the Final Inspection. Chapter 11 will help them survive the current housing marker. They just have too many expensive projects like Fulton Ranch.
Raleigh, NC has been a reliable and stable market for years and has weathered slow downs in the past but this time around the crunch is too much for many of our regional home builders. It’s easy to point fingers but it’s smarter to learn lessons…
You may read about the Raleigh market on our blog called Raleigh Real Estate News
When it was a gold rush the builders were building several houses at one time. Since the market was HOT; new builders started to pop up due to easy money. Nobody looked ahead or started to see the downturn cycle coming.
**cashflowCindy´s last blog post..Real Estate Investing – SixMinutestoSuccess
…One of the Good Guys please…good guys don’t keep consumer Deposits and say “oh well too bad”
oh..to whom it may concern…I have nothing personal with the owner of Fulton. I just don’t believe they’ve practiced business with the consumer at heart. Just worried about the dollar, and when that happens everything else happens for its own reasons…just my 2 cents…but what would I know I’m no financial expert.
Once the foreclosure stage is over then the economy will turn around and start to boom again. I agree; everybody jumped in the water swimming for easy money. Businesses need to see trends and be prepared for downturns in the economy. The strong will survive the storm. Once this storm is overwith their will be others. Hopefully, people will learn from this storm to see future storms.
**CashFlowCindy´s last blog post..Real Estate Investing – Robert Allen – Creative Down Payments
Very interesting article, as are some of your other posts. I have bookmarked your great site for future visits.
Fulton Homes Sales Corp., which handles home sales and warranties, is a separate entity that was not included in the bankruptcy..alquiler piso madrid
Fulton Homes Sales Corp., which handles home sales and warranties, is a separate entity that was not included in the bankruptcy..alquiler piso madrid