The brick house on Robdot Drive in Oak Ridge is just a 10-minute drive from the Schneiders’ place in Summerfield, and it looks like any other of the prosperous homes that have sprung up like mushrooms from the red clay earth here over the last five years.
Come closer and you quickly realize that something’s not quite right: weather-proofing peeks out from around the front door, and an open garage reveals that the interior of the house contains little more than bare wooden beams.
Construction here stopped abruptly months ago, and now it’s just one of scores of McMansions nearby sitting empty and forlorn on what was farmland until a few years ago.
Tobacco barns still dot the landscape, but the farms they once served are gone, paved over by developers and other speculators who figured that housing prices could only keep climbing.
"It was like, ‘Build it and they will come,’ " says Lewis Tillman, who, with his wife Tara, owns Westchester Realty. "Except they didn’t come."
To make matters worse, these outlying suburbs were built on the premise of cheap gasoline, says Keith G. Debbage, a geography professor at the University of North Carolina at Greensboro who tracks the local economy.
With gas at $4 a gallon, he says, "travel costs are now a serious consideration." Oak Ridge and Summerfield are bedroom communities, he notes, and many commuters drive 30 to 45 minutes each way to jobs in Greensboro and Winston-Salem. "People are doing a serious rethinking of where they live," he adds.
Now reality has caught up with the hopes that animated so many real estate markets around the country.
When the Tillmans moved down to Greensboro from Cortlandt Manor, N.Y., four years ago and discovered these fast-growing suburbs, Mrs. Tillman says, "we thought we’d be flipping homes. Now there’s just so much inventory out there."
In one Oak Ridge subdivision, Mrs. Tillman’s client is asking $409,000 for a brand new four-bedroom with granite countertops in the kitchen and a Jacuzzi-style bath. She just marked it down from $422,000, but given the slow pace of sales in the neighborhood, that may not be enough. "Builders just kept putting up one spec house after another," she says.
About 18 months ago, adds Casey Durango, a broker at Yost & Little, builders could hardly keep pace with demand. "They were selling drawings," she says.
When buyers do turn up nowadays, she says, "they smell blood in the water and routinely offer 15 to 20 percent below the asking price."
One big reason buyers are being so conservative is that mortgage standards have tightened considerably. "We’ve kind of gone back to the old days," says Christie Caldwell, who has worked as a mortgage broker in Greensboro since 1986.
While some analysts say lenders have overreacted, Ms. Caldwell says they are simply being prudent. Traditionally, she explains, homebuyers who put down less than 20 percent were required to pay for private mortgage insurance.
But at the height of the bubble, banks turned a blind eye as borrowers did an end run around the rules by taking out two mortgages, Ms. Caldwell says. That’s much harder to do these days, she says.
Similarly, homebuyers with lower credit scores often have to put more down. Everything just seems more difficult, she says. "Before, we could quote rates without knowing credit scores, debt-to-income ratios and the size of the down payment."