America has a new kind of ghost town, haunted by the spirits of the recession. Developers caught up in the runaway housing boom overbuilt and oversold lots, houses and condos, leaving neighborhoods barren with uninhabited model homes, eerily desolate luxury condos, and abandoned McMansions in the aftermath of the collapse.
Most of these recession ghost towns lie in heavily-hit regions of the housing crisis: South Florida, Arizona, California and Nevada. Some in metropolitan areas like Phoenix and Miami, have a better chance of surviving after the housing market recovers, but others are in remote desert developments where municipal services have long since left. “We saw a lot of overbuilding in areas where there isn’t going to be much buying activity,” says Rick Sharga of RealityTrac. “Those areas are going to take a long time to come back, if they ever do.”
There are currently 18,700 vacant units across the country, according to Census data, and vacancies rates in the homeowner market have grown 12 percent since the recession started. Vacancies are the highest in the southern and western regions of the country.
One housing development in rural Victorville, CA, planned to have 16 new homes, but after the developers completed only four of them, they were unable to find any buyers and the development was repossessed by the bank. Instead of paying fines to the city on the unfinished development, the bank decided to bulldoze the shiny new $300,000 dwellings, as nearby residents watched in horror. Now all that’s left is windswept lots.
In South Florida, high-rise ghostly towers filled with empty condos speckle the skyline. Miami alone produced 23,000 new condo units from 2003 to 2007 and is now experiencing one of the worst condo busts of any city in the country. Nearby Broward and Palm Beach counties built or approved more than 18,000 condos during that time, many of which now sit empty. “You can’t throw a rock [in South Florida] and not hit an empty condo building,” says Sharga.
Many condo buildings and grounds are still maintained to create the illusion of residents for potential buyers, according to Sharga. The pools are cleaned, the lawns mowed, and staff members and doormen hang out in the lobbies to greet passersbys. If a homebuyer is stuck with a unit in an empty or half-filled development, proceedings can get complicated. Most of the time, the developer or bank will negotiate with residents to refund their money or work out a new contract as the building enters foreclosure. But other residents choose to stay. One condo-owner in downtown Fort Myers, FL, refused to leave the 32-story building as other owners took buy-outs, and he and his family are now the only residents living in the entire building. Birds have nested in the empty apartment unit next door and the pool is maintained, but sits unused and unheated. He says the empty tower is particularly creepy at night. “I only have the lights on my floor and I’m the only one there,” he says.