Growth/ A Special Report : Homebuyers Angry Over Builder’s Subsequent Price Cuts : Moorpark: A developer slashed prices $30,000 to $40,000. Those who bought homes shortly before the decrease launch a protest movement.
A slump in the housing market has upset a group of Moorpark residents who recently bought new houses only to discover a month later that similar houses were selling for $30,000 to $40,000 less.
Robert and Robin Newlon, who purchased a new house for $309,000 in October before the drop in prices, are among the residents who have launched a homeowners’ protest movement.
For those caught in the housing slump in Moorpark, the Newlons say, the American dream of owning a home has turned into a nightmare.
The Newlons put a deposit on their two-story, four-bedroom Moorpark house the day they saw it last summer, sold their North Hollywood condominium and happily moved their belongings from the San Fernando Valley to a development called Creekside II.
To their dismay, several weeks after they closed escrow Oct. 13, they saw a newspaper ad announcing that the builder, Urban West Communities, was slashing about $40,000 off the price of the homes in its development.
Urban West had sold the first 28 homes in the development to the Newlons and other families before dropping the price for the remaining 26 homes because of the slumping housing market in the county.
Kathy Dantagnan, the company’s vice president of sales and marketing, said the price reduction was made as a last resort to boost sagging sales. She said the decision was made Nov. 4 after the company had gone three months without any sales at Creekside II.
“The market had changed; the decision was not made lightly,” she said.
That, however, was little comfort to the Newlons, who complain that they will not receive any compensation for the price reduction.
Robert Newlon said, “$30,000 to Urban West is a blink of an eyelash. . . . $30,000 to Robin and Robert is 10 to 15 years of saving.”
Their combined annual income, Robin said, is about $70,000. She commutes to Burbank, where she manages a dental office, and her husband drives to Canoga Park, where he works as an engineer.
Robert, 37, flushed angrily as he talked about Urban West. He charged that the company should have notified homeowners of the price reduction before their escrows closed so they could reconsider whether they wanted to go through with the purchases.
No effort was made to contact the Newlons or 25 other families who bought homes in the development because their escrows had closed before Nov. 4, Dantagnan said. She said concessions were made for one family whose escrow closed just two days before the decision to cut prices and for another family whose purchase became final six days after.
“Obviously it was not a pleasant situation for those who had already closed escrow,” she said. “But our idea was that prices would stabilize over there, and they would later be able to recoup their losses.”
On that score, the unhappy homeowners of Creekside II are skeptical.
The Newlons and other families who first bought houses in the development have formed a group to protest the actions of Urban West. They plan to picket the sales office and distribute leaflets to potential buyers for Urban West’s new 500-unit development in Moorpark.
“We want to warn prospective buyers exactly what they’re getting into. We want to warn them that this might happen to them too,” said Roger Mahnke, the group leader.
Members of the group say they are hopeful that Urban West may eventually refund some money to them. But there is not an overwhelming sense of optimism, and Dantagnan said there are no plans for any compensation.
Meanwhile, as the homeowners prepare for battle with the developer, Robert Newlon said there is some tension among those who bought early and those who bought after the price cuts.
“There’s always going to be a resentment . . . that they’re always $30,000 ahead of you,” he said. “I don’t care how long we’re here, there’s still going to be an undercurrent. That’s not going to breed a family atmosphere.”
Urban West has sold all but one of the houses in the development, and company officials expressed the wish that the angry homeowners will quickly put their picketing plans aside in the greater interest of overall property values.
“If they slow down our sales and negatively impact our pricing, it’s a negative impact on the increase of the value of their own properties,” Dantagnan said. “The greater the value of our homes, the greater the value of theirs.”
