Homeowners Protest Price Cuts, Seek Rebates
In a dramatic sign that the falloff in the state’s real estate market is hitting home, about a dozen residents angry that houses like ones they bought months earlier are now selling for up to $56,000 less picketed at their Antelope Valley tract Saturday.
The homeowners in the Griffin Quartz Hill project are demanding that the developer, Calabasas-based Griffin Homes, reimburse them for the huge drop in sales prices. The protesting homeowners claim the developer’s markdown has devalued their houses and wiped out their equity.
“It’s like Griffin has said to us, ‘It’s the market conditions. Shut up and leave us alone,’ ” said Richard Hilblom, a leader of the protest who paid more than $260,000 late last year for a four-bedroom house now selling for under $200,000.
A spokeswoman for the developer said Saturday that while Griffin is sympathetic to the homeowners’ plight, the company has no intention of reimbursing them. “That is not a possibility at this time,” said Marion Kiesling, Griffin’s vice president of sales and marketing.
The controversy is just one of several of its kind to have emerged recently in the Antelope Valley, where developers have been forced to cut prices and offer a variety of other incentives--including free cars to buyers--to spur lagging sales.
The sudden markdowns shocked home buyers who said they believed the rise in the state’s housing prices would continue, and that the value of their investments could only increase. That feeling may have been particularly strong in the Antelope Valley, which in recent years has been one of the nation’s fastest-growing areas. Prices in the region rose more than 24% during the year ending in May, on the heels of several years of double-digit increases, according to TRW Real Estate Information Services.
Protesters in the tract said they understand market prices can vary. But they also accused Griffin of misrepresentation, claiming a former salesperson in the tract assured them when they bought that Griffin would never cut its prices. Company officials denied that such promises were ever made.
The angry homeowners also accused Griffin, which bills itself as “The Customer Care Company,” of failing to repair a host of problems caused by what they said was shoddy construction. Kiesling acknowledged that repairs have been delayed, but said the company plans to make the needed repairs soon.
Griffin’s heavily advertised price cuts appear to have been among the steepest in the Antelope Valley, where in recent years the majority of new house sales in Los Angeles County have occurred. However, Kiesling said many other area developers have taken similar steps.
In Griffin’s project, the largest of three models that was selling for $255,990 at the start of this year is now being offered for $199,990. The middle-sized house that had been selling for $219,990 is now being offered at $184,990. The smallest model, the price of which had been similarly reduced, is sold out.
Earlier buyers in the planned 112-house tract, located in the pricey Quartz Hill area that is known by real estate agents as “the Beverly Hills of the Antelope Valley,” say the drastic price cuts have made resales impossible.
As a result, those who bought there earlier feel trapped and fear they will never recoup their investment.
“We’ve got to show them we’re serious here. We want something resolved,” said David Feller, who bought a 1,960-square-foot, four-bedroom house in the tract for about $210,000 in December. Griffin later cut the price on such houses to $175,000 before it sold out.
Feller, who has put up a cardboard sign in his front yard reading “Unhappy Griffin Home Owner,” said he has had to pass up a likely job offer in Seattle because he would have had to take a large loss on his house in order to sell it. Feller also said he had to pass on a business opportunity because the bank had appraised his house for less than what he paid for it and would not loan him enough money.
In 100-degree heat, Feller and about a dozen other residents of the tract, located at Avenue L and 55th Street West, marched in front of Griffin’s models for several hours with signs that read “Unsatisfied Owner” and “Our Equity’s Gone.” They said they plan to continue sporadic picketing.
Griffin began reducing prices at the tract earlier in the year. But some of the homeowners became furious about three weeks ago when Griffin began taking out full-page newspaper ads pitching price cuts of between $35,000 and $56,000 on the remaining houses.
The headline on the company’s ads was “Our Loss, Your Gain.” But homeowners who bought into the project before the price cuts at the higher prices sarcastically insist it has been their loss and Griffin’s gain.
Even with the markdowns, however, a salesperson at the project said Saturday that the company has only sold three houses in the past three weeks, leaving eight on the market. Company officials said selling one house per week is considered good in such tracts nowadays, whereas a year ago buyers were vying with one another to sign purchase agreements long before the houses could be built.
Kiesling said the company had to cut its prices to sell the remaining houses in the tract. She said the price cuts are symptomatic of an overall falloff in the new housing market, which has hit higher-priced houses especially hard.
She and other company officials argued that buyers who purchased their houses earlier should still make a profit on their investments over time, despite the price cuts. But the protesting homeowners said they will be lucky if they ever make up the huge differential.
Kiesling, echoing comments by other builders in the area who have heard complaints about plunging prices, said just as developers would never share in future profits from the houses, they shouldn’t be held responsible when prices fall.
HOUSE HUNTING: Buyers waited in line to buy unsold lots in a Quartz Hill project. B7
