"Foreclosures have a definite impact on the market it's flooded the market with homes and it's pushed the prices of homes down," said Brian Ennis, President of Ennis Homes. His company, which has subdivisions under construction in Fresno, Kings and Tulare Counties has just filed for bankruptcy, and is suspending development of projects in Visalia, Dinuba and Wasco. "The three projects we are not moving forward with, that was not our decision, that was the bank's decision," said Ennis.
Unable to get financing, Ennis says the company has no choice but to reorganize in order to stay in business.
Prandini says unless the housing market changes quickly, more builders could face big setbacks.
"If it continues for another year or so it could cause some problems for some of the builders and they may just have to cease operations and start again when things improve," said Prandini.
It's a statewide problem. The number of new homes built in California last year was a record low 33 thousand. This year it's expected to be only 30 thousand.
Builders are hoping the Federal Stimulus package will include money to help buyers move into new homes, not just foreclosures. Such incentives would help ease unemployment by putting construction crews back to work.
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