This fits my theory that Arizona homebuilders build until they run out of money. That is, Arizona homebuilders were horrible about cutting production after the market tanked. They didn’t.
I don’t know about the homebuilder mentioned in the article, but most Arizona homebuilders keep building like pharaohs until they run out of money.
Recent bankruptcies in Arizona include Gilbert home builder Trend Homes, which filed for Chapter 11 reorganization in late January and was purchased by Najafi Cos. in June. Last week, two Valley “land banks” that bought and sold lots for Trend and Scottsdale-based Elite Homes also filed for bankruptcy protection.
With the shutdowns comes financial damage to investors in the businesses and to contractors working for them.
Charlevoix started in 2002 and had grown quickly to 32 employees within four years. The Arizona Small Business Association recognized Charlevoix as one of its 50 Arizona Companies to Watch in 2006. It was planning or building communities in Phoenix, Glendale, Chandler and the southwest Valley.
But within a year, Charlevoix’s sales fell flat and investors, lenders and the contractors began to demand payment of tens of millions of dollars from the cash-strapped company.