Developer building 5 spec houses in Fort Salonga
Developer Walter Morris won't sell any house in his Fort Salonga subdivision, The Estates at Old Bridge, until the entire project is done. (Undated) Credit: Handout
Partially finished residential communities are like ghost towns across the nation, abandoned in the housing crisis by firms that built "on spec" -- without a buyer's contract.
Speculation building rarely happens on Long Island because the industry here learned not to when the 1980s boom was followed by the bust of the early 1990s.
But five spec houses are exactly what developer Walter Morris is raising in Fort Salonga. He's not even talking price with any potential buyer until all five are done, from the last bush to the last doorknob. The gates have locks at The Estates at Old Bridge and it won't be open to the public until Labor Day or so, with a few brokers to get a peek at the under-$1 million listings next week.
Is Morris unscrewed? Far from it, he said.
"Today, there's been so many foreclosures, so many projects that have gone bad that we don't want customers coming and wondering what the future of this subdivision is," said the co-owner of Morgan Creek Development, based in Huntington. "So we're not going to offer the homes for sale until all the homes are finished, landscaped and completed."
Over the last few years, potential buyers have balked at making deals in new home communities, fearing the developer would go bust before completion. That happened to many in states that had swathes of buildable land, like Nevada and California; those states top the nation in foreclosure rates.
Ira Tane, president of the Long Island Builders Institute, does not advise spec building in most cases, especially if the developer borrowed to start the project and has monthly loan payments.
"If you don't go crazy and you build a decent product at the right price, you will sell it," he said. "But I don't encourage it for a lot of people because they don't have the holding power. You got a bank involved, you're going to have to think very hard before you go down that road."
Morris is confident about finding buyers: "They can see what they're buying, not just the homes but the entire community."
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