Foreclosures Create Ghost Town In Valley Town

January 3rd, 2008

Why is nobody coming home in the suburban fringes of Phoenix Out? As the day come to a close, why are people not returning home and why is the neighborhood empty? These questions seem troubling but it is a fact that not long ago, builders were raising home prices here thousands of dollars week after week. Now, the whole area looks like a ghost town , with empty houses lining the streets. Families camped out for lotteries to win the right to buy. Buyers gambled with loans whose risks were obscured by euphoria and now the lands stay barren.

This is the story of how America’s real estate boom came to a seemingly ordinary subdivision called the Villages at Queen Creek, where there were extraordinary times only because of the easy credit given. They were the times one could not forget but it was only for a while. The empty homes now raise serious doubts about what will be coming next.

Because while the pressures at work in Queen Creek were extreme, the choices people made — and the consequences — are not so different from those faced by thousands of other homeowners and their neighbors.

In June of 2004, Dave Gustafson took time off from his job as a supermarket produce manager, and the family headed to Arizona to visit relatives. There was a buzz of construction and a word of low home prices convinced them to have a look around. Dave and his wife Maryann liked what they saw.

It was a subdivision called the Villages which caught their attention. It was a crescent-shaped warren of streets cradling a golf course, quickly filling with sand-colored stucco homes. The local schools had a good reputation and it was very affordable. There was an extra-big lot on a cul-de-sac, with enough room in back for a pool. That was heavenly.

“The sales person convinced them that they (homes) were going up $1,000 a week,” Dave Gustafson recalls. “So when we came to look, we signed right away.”

It was easy to get a home them. A down payment of $2,000 to $5,000 was all it took to get started. Buyers could borrow at low teaser rates, requiring payments of nothing more than interest.

As promised, the prices of homes were going up faster than the houses themselves. But they were simply buying a place to live, hopefully for a good, long time not knowing that the Great American Dream which had already began was about to have an early end.