It’s a safe bet that no one saw what was coming for the metro Denver real estate market when Carolyn Baker put a $20,000 deposit toward the purchase of a townhome in Castle Pines North early last year.
Baker, 63, wrote a check to one of the area’s largest homebuilders in January, put her home up for sale and prepared to move into the $330,000 home by summer.
Her timing could not have been worse.
A firestorm was building that would sweep over the nation’s financial and real estate industries that would singe her builder, Village Homes, and burn homebuyers, contractors and vendors.
Baker sold her house in June to meet her contingency agreement with Village Homes. But the builder became trapped in a bind with creditors, filed bankruptcy and has been unable to make the finishing touches required before the deal can close and Baker can move in.
Dozens of Village Homes buyers are, like Baker, stuck as the builder works its way through Chapter 11 reorganization.
So, even as real estate agents report growing interest in their showings, prospective new homebuyers have reason to pay as much attention to the financial health of their builder as they do to floor plans, cabinet upgrades and warranties.
Even those already living in a finished home wonder whether developers will be able to finish their projects and put houses on the empty parcels that make up their neighborhoods.
Local builder McStain Neighborhoods closed down its headquarters in Louisville in November and laid off much of its staff, which prompted concern about the future of the 40-year-old company and projects it is building.
Since then, McStain has been on a communications offensive — updating buyers, vendors and contractors with regular e-mails and meetings on the company’s financial status.
“We try to be as transparent as we can on what worked and what didn’t,” said Tom Hoyt, who runs the company with his wife and company co-founder, Caroline.
Meetings are held in sales offices and, with much of its business now conducted and recorded electronically, McStain says it has “gone virtual but is not virtually gone.”
BJ Hoch, a real estate broker who last year bought a patio home near a McStain development in Lowry, said she is confident McStain will finish its part of the community.
“I am not feeling like we are going to be the only tepee in town,” Hoch said.
Village Homes has devoted a portion of its website, VillageHomes , to its reorganization.
Village Homes president Matt Osborn said the company communicates regularly with buyers who were under contract at the time of the Chapter 11 filing. Osborn said his company reached an agreement with its lenders that should allow it to finish Baker’s townhome and others.
For her part, Baker is sympathetic to Village Homes but says the communication from the company has been “miserable.” She said it would be simple to update other buyers like her with a weekly e-mail.
