It’s going to be interesting to see which builders go belly-up in the next three years. The ones at most risk are those that have just started large developments as the market softened, and especially those that bought large tracts of vacant land in the past 12-18 months, because that land would be worth less, maybe a lot less today. When home prices are increasing or decreasing, vacant land moves up or down faster than finished homes.
In the early to mid 90’s, one builder that almost went bankrupt was Davidson Homes. I have a friend who worked for Davidson at that time, and the only reason they didn’t go completely out of business was because they took on a large Canadian company as a financial partner. When the market slowed, Davidson was doing a lot of different projects, but I think the one that really dragged them down was the Mt. Woodson development and golf course. I’m not sure if they still have their Canadian partner.
