Major Real Estate Projects that Succumbed to the Housing Bubble

[kernals12]

I love to speculate on "what if" and given the presence of a "Fictional Highways" section on this website, it looks like you guys also do. When the subprime mortgage bubble popped in 2007 and 2008, the real estate industry practically ground to a halt. In the US, the impact was most acute in California, Nevada, Arizona, and Florida. I thought I'd make this thread to document some of the grandiose plans that never came to be

It's easy to forget what shady tactics were being used in the run-up to the financial crisis. In Arizona, so many people living out of state claimed to be residents, and even illegally got license plates, that it impacted the state's population statistics. When the bubble burst, lots of people "moved out". Based on this garbage data, the state was forecasting 15 million Arizonans by 2050. And developers were planning entire cities for these people.

One example is Amaranth, located in Maricopa County near the Pinal County line. It was to have 44,000 homes, enough for 120,000 people in the uninincorporated community of Mobile. The city of Goodyear decided to annex the land. The Amaranth Land company was to develop it, a consortium of 3 banks, one of them was Goldman Sachs. Montage Holdings bought the land for $80,000 per acre. In 2009, they defaulted on their payments and in 2011, Arcus Capital bought it for $3,200 an acre and even though Phoenix is once again a hot real estate market, there's no talk of developing it.


In the far north reaches of Phoenix, there was Palisene. I can't find many details on it except the planned 1 million square foot, 4 anchor mall, which was going to have a retractable roof. On google satellite you can see the markings of streets and lots, but if you look at streetview which is updated more frequently, the roads are still non-existent as of March 2021. And the whole thing is located on a floodplain, known as Rawhide Wash.


At the far edge of the East Valley, the most ambitious of the bubble area schemes was Superstition Vistas. Boosters wanted to plan the whole 275 square mile plot of land as one city that would have as many as 1 million people. That fell apart quickly and it lay dormant for a decade, but recently, development has started on the first 2,800 acres. But it looks like Superstition Vistas is destined to develop in piecemeal fashion.


Heading up to Nevada, we have Coyote Springs. It was to be a city of 416,000 50 miles north of Las Vegas straddling the line between Clark and Lincoln Counties. All that's been built is one golf course
. The project was conceived by Harvey Whittemore, and the impact the project would have on endangered species plus Whittemore's alleged use of his close ties to then-Senator Harry Reid to get around those regulations led to huge controversy. In 2012, Whittemore was sentenced by a grand jury to 2 years in prison on 4 felony convictions.

What other projects can you guys think of that went up in smoke when Lehman Brothers filed for Chapter 11?

[Max Rockatansky]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013. 

[kernals12]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

[Max Rockatansky]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

It contributed driving up costs considerably, so yes it played a big part.  Another factor was it was in my career interest to move to Florida given what I do was in way higher demand at the time. 

When I moved to Phoenix in 2001 my brother had bought his house near Tatum and Bell a couple years prior (1998 or 1999) for $189,000.  That same house was selling for $630,000 right before the real estate bubble collapse.  Even post bubble it shot back up to a selling price of about $370,000 in 2012.  This was a 1,600 square foot home in an average neighborhood, nothing special or fancy. 

I initially went to Key West when I took a DOD job. When the DOD transferred me to mainland Florida I wound up owning a home I sold for 170k in 2015.  Said house was in a nice neighborhood, 1,650 square feet and was built in 2007.  Money usually went way further in Florida than it did for Phoenix regarding real estate prices. 

Even now the current home we own in Fresno was purchased for 180k.  It is also 1,650 square feet, in an HOA neighborhood and was also built in 2007.  The big advantage Fresno has over Florida is access to recreational opportunities more my speed and ironically similar to Phoenix.  Out of our combined income about 10% in a normal year goes into a mortgage payment.  I'm always looking for another transfer but really there isn't much out there domestically that makes a lot of sense to pursue at the moment financially.

[kernals12]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

It contributed driving up costs considerably, so yes it played a big part.  Another factor was it was in my career interest to move to Florida given what I do was in way higher demand at the time. 

When I moved to Phoenix in 2001 my brother had bought his house near Tatum and Bell a couple years prior (1998 or 1999) for $189,000.  That same house was selling for $630,000 right before the real estate bubble collapse.  Even post bubble it shot back up to a selling price of about $370,000 in 2012.  This was a 1,600 square foot home in an average neighborhood, nothing special or fancy. 

I initially went to Key West when I took a DOD job. When the DOD transferred me to mainland Florida I wound up owning a home I sold for 170k in 2015.  Said house was in a nice neighborhood, 1,650 square feet and was built in 2007.  Money usually went way further in Florida than it did for Phoenix regarding real estate prices. 

Even now the current home we own in Fresno was purchased for 180k.  It is also 1,650 square feet, in an HOA neighborhood and was also built in 2007.  The big advantage Fresno has over Florida is access to recreational opportunities more my speed and ironically similar to Phoenix.  Out of our combined income about 10% in a normal year goes into a mortgage payment.  I'm always looking for another transfer but really there isn't much out there domestically that makes a lot of sense to pursue at the moment financially.

How much is your house worth now? It must be at least half a million.

[Rothman]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

^So much this.

The Internet has been won for the day.

[CNGL-Leudimin]

Spain is also full of such projects. Many locations where the infrastructure was put in place, but then no buildings, or at most one or two, popped up. One such example is near Zaragoza, where initially only one building was finished and several others were left unfinished. Another group of houses was built by the late 10s, but otherwise it has never really taken off.

[Max Rockatansky]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

It contributed driving up costs considerably, so yes it played a big part.  Another factor was it was in my career interest to move to Florida given what I do was in way higher demand at the time. 

When I moved to Phoenix in 2001 my brother had bought his house near Tatum and Bell a couple years prior (1998 or 1999) for $189,000.  That same house was selling for $630,000 right before the real estate bubble collapse.  Even post bubble it shot back up to a selling price of about $370,000 in 2012.  This was a 1,600 square foot home in an average neighborhood, nothing special or fancy. 

I initially went to Key West when I took a DOD job. When the DOD transferred me to mainland Florida I wound up owning a home I sold for 170k in 2015.  Said house was in a nice neighborhood, 1,650 square feet and was built in 2007.  Money usually went way further in Florida than it did for Phoenix regarding real estate prices. 

Even now the current home we own in Fresno was purchased for 180k.  It is also 1,650 square feet, in an HOA neighborhood and was also built in 2007.  The big advantage Fresno has over Florida is access to recreational opportunities more my speed and ironically similar to Phoenix.  Out of our combined income about 10% in a normal year goes into a mortgage payment.  I'm always looking for another transfer but really there isn't much out there domestically that makes a lot of sense to pursue at the moment financially.

How much is your house worth now? It must be at least half a million.

Last I checked the assessed value was 430k.  The valuation was helped immensely by specific California laws making new home construction difficult coupled with a new Sanger School District High School being built across the street outside the Fresno city limit.

[Max Rockatansky]

I'm suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That's basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

^So much this.

The Internet has been won for the day.

Get away from the coast and Florida generally has a pretty reasonably priced real estate market.  My understanding is that Florida had similar housing speculation and home flipping during the real estate bubble, but I wasn't present for those conditions.  My sister's house near Tampa was partially inflated by early real estate bubble prices, I believe it was purchased in the mid-200k range. 

None of what I said should he taken as an insinuation that I somehow enjoyed living in Florida more than Arizona.  I was incredibly bored in Florida given the outdoor recreational opportunities that didn't involve a boat were limited.  My original plan was to transfer to Charleston in early 2015 but that fell through because my Mom fell out of remission (she lived in Spring Hill at the time). 

Later year 2015 I had transfer opportunities to the Memphis area or Central California.  The then low cost of owning a home in San Joaquin Valley coupled with being able to hike on a whim is what sold me on Central California.  I ended up moving in January 2016 to avoid having to file a 2015 California tax return. 

The amusing thing is that I worked in California twice previous as part of my job roles from 2007-2010 and 2011-2013.  Those two jobs were centric to the Los Angeles, Inland Empire and San Diego areas.  Visiting those cities from Phoenix was fine but none of them were places I wanted to live due to the high home prices coupled with horrid commutes.  I even refused a paid relocations to Los Angeles and Mission Valley in San Diego.  The irony of ending up in California anyways isn't lost on me, but it's a situation far more agreeable than it would be in the bigger cities.

[kernals12]

Spain is also full of such projects. Many locations where the infrastructure was put in place, but then no buildings, or at most one or two, popped up. One such example is near Zaragoza, where initially only one building was finished and several others were left unfinished. Another group of houses was built by the late 10s, but otherwise it has never really taken off.

But what was the coolest of the failed projects? Any plans for new cities for 100,000 or ginormous shopping malls?

[bing101]

https://www.msn.com/en-us/money/realestate/california-city-the-gigantic-master-planned-community-that-never-really-grew-up-bartells-backroads/ar-AAXfFXo


https://www.atlasobscura.com/places/california-city-unbuilt-suburb

California City, CA was planned to be a large city but it never got a population to move to that location.

[Max Rockatansky]

Another one I ran across by accident was California Valley at Carrizo Plain.  California City at least was near a major part of CA 58, who knows what planners were smoking with Carrizo Plain and the San Andreas Fault?  From what I recall part of the Carrizo Plain concept was to use Soda Lake as a reservoir which would have somehow made the area attractive for residential development. 

[kernals12]

https://www.msn.com/en-us/money/realestate/california-city-the-gigantic-master-planned-community-that-never-really-grew-up-bartells-backroads/ar-AAXfFXo


https://www.atlasobscura.com/places/california-city-unbuilt-suburb

California City, CA was planned to be a large city but it never got a population to move to that location.

That was back in the 60s, I was talking about projects from the 2000s.

[CNGL-Leudimin]

But what was the coolest of the failed projects? Any plans for new cities for 100,000 or ginormous shopping malls?

There's that half finished city around Guadalajara-Yepes HSR station, which IIRC would have housed over 50,000 if fully built. But otherwise no new cities were really planned, generally they were new developments near existing towns.

[brad2971]

http://www.peakaz.com/addpic/FIB%20Watermelon%20Package%20-%20Copy.pdf

Merrill Paloma Ranch was supposed to build enough housing for an additional 50000 residents to Gila Bend, AZ. A Community Facilities District was set up (on paper), and the Town of Gila Bend annexed the land in question. ADOT had finalized an Environmental Assessment (EA) for a freeway connection for SR85 from its current four-lane end to I-8, and had even built the initial construction of the SR85-Pima St intersection with Maricopa Rd: https://www.google.com/maps/place/Gila+Bend,+AZ/@32.9538717,-112.6890124,15z/data=!4m5!3m4!1s0x80d528408d307de3:0x6dea177bee0b822b!8m2!3d32.9478236!4d-112.7168305

As you might expect, not a single facililty was built on that Merrill Paloma Ranch land. As you might not expect, ADOT has not only not constructed the freeway connection of SR85 to I-8, but also there isn't anywhere close to the traffic to justify that freeway connection at this time. Meanwhile, in the last two censuses, Gila Bend has had small declines in population.

[kernals12]

Is the real estate industry really more laden with empty promises than other industries or is it just that they leave a bigger mark?

[brad2971]

Is the real estate industry really more laden with empty promises than other industries or is it just that they leave a bigger mark?

I guess it depends upon what you mean by "leave a bigger mark." On an inflation-adjusted basis, Great Plains agricultural land is worth less per acre than what it was in the 1950's (yes, the 1980s and 1990s were that brutal in that part of the country). This is the case despite the multiple uses for corn and soybeans that have developed since those 1950s, as well as the fact that many pork, beef, chicken, even turkey processing plants have moved to the small towns around that farmland to be closer to the feedlots and farms that raise those animals.

Yet most folks feel abandoned Great Plains farm houses and barns have a certain amount of...quaintness and nostalgia attached to them. Unlike large parts of Detroit, they're not treated as though they are ruin porn.

[skluth]

While closer to a small town than an entire city, a developer is bringing "affordable housing" to a long-stalled development on the north side of Cathedral City. The original developer went bankrupt with almost 900 lots still unbuilt. Details regarding the new affordable price but a quick check of Zillow shows completed homes in the development are selling from $440k-700k but no info has come out regarding actual prices of the new homes; many of these homes were built in the aughts. I would never buy there because the north end of Cathedral City is essentially living downwind of a wind tunnel as westerly winds are compressed through the San Gorgonio Pass along I-10, frequently hitting 60 mph in the pass; 40 mph+ winds are common in that part of the valley.

Housing here has mostly boomed since early in the Covid crisis as the Coachella Valley has experienced a similar boom to the Central Valley as high housing prices drive the middle class out of the Bay Area and the LA Basin. (The median price for homes here has jumped from about 400K in Nov 19 to over 600K in Nov 21.) We've had more problems with stalled resorts than subdivisions.

[paulthemapguy]

The town where I grew up, Oswego, Illinois, was growing like wildfire until it suddenly stopped.  I remember they built this "Hunt Club Elementary School" in a future Hunt Club development.  The school opened, but the houses stopped being built.  So you had this new school in a system of streets lined with undeveloped dirt lots.  Things started picking up about 5-10 years later, and the homes eventually got built since then.  But the school district had a big monetary problem for a while, building this new school for nobody.

https://www.google.com/maps/@41.6509218,-88.3739072,15.5z

[kernals12]

The town where I grew up, Oswego, Illinois, was growing like wildfire until it suddenly stopped.  I remember they built this "Hunt Club Elementary School" in a future Hunt Club development.  The school opened, but the houses stopped being built.  So you had this new school in a system of streets lined with undeveloped dirt lots.  Things started picking up about 5-10 years later, and the homes eventually got built since then.  But the school district had a big monetary problem for a while, building this new school for nobody.

https://www.google.com/maps/@41.6509218,-88.3739072,15.5z

The way Chicago's exurban growth came to a halt after 2010 is pretty staggering.

[I-39]

The town where I grew up, Oswego, Illinois, was growing like wildfire until it suddenly stopped.  I remember they built this "Hunt Club Elementary School" in a future Hunt Club development.  The school opened, but the houses stopped being built.  So you had this new school in a system of streets lined with undeveloped dirt lots.  Things started picking up about 5-10 years later, and the homes eventually got built since then.  But the school district had a big monetary problem for a while, building this new school for nobody.

https://www.google.com/maps/@41.6509218,-88.3739072,15.5z

The way Chicago's exurban growth came to a halt after 2010 is pretty staggering.

True. The 2008 recession really exposed a lot of the underlying issues in Illinois.

[formulanone]

I’m suddenly getting flashbacks of why leaving the Phoenix area was highly desirable around the turn of the 2010s.  Phoenix was great a 3 million people in the metro area but real estate speculation, house/property flipping and population influx took it down a big peg.  Given some similar real estate speculation and home flipping tactics started to re-emerge around 2012 it was a huge indicator for me to seem personal prosperity elsewhere.  That’s basically how I ended up in Florida by early 2013.

You moved to Florida to get away from shady real estate tactics?

^So much this.

The Internet has been won for the day.

Florida is littered with lots of shady/questionable real estate plans, but I don't think there's too many that affected home owners in the 30-40 years. "The Compound" is probably the most recent one.

Unless you feel sorry for people who intentionally bought a cheap home in the middle of a giant empty grid, located near nobody or nothing at all, and they didn't care about a lack of services in a 20-30 mile radius. What sort of sucks is when the areas became more crowded but services were still lacking, but now there's more people, which removes most of the reasons to be isolated...

[CapeCodder]

A few large scale subdivisions near St. Peters, mo come to mind.

[kernals12]

The town where I grew up, Oswego, Illinois, was growing like wildfire until it suddenly stopped.  I remember they built this "Hunt Club Elementary School" in a future Hunt Club development.  The school opened, but the houses stopped being built.  So you had this new school in a system of streets lined with undeveloped dirt lots.  Things started picking up about 5-10 years later, and the homes eventually got built since then.  But the school district had a big monetary problem for a while, building this new school for nobody.

https://www.google.com/maps/@41.6509218,-88.3739072,15.5z

The way Chicago's exurban growth came to a halt after 2010 is pretty staggering.

True. The 2008 recession really exposed a lot of the underlying issues in Illinois.

3 words: unfunded pension liabilities

[Max Rockatansky]

The town where I grew up, Oswego, Illinois, was growing like wildfire until it suddenly stopped.  I remember they built this "Hunt Club Elementary School" in a future Hunt Club development.  The school opened, but the houses stopped being built.  So you had this new school in a system of streets lined with undeveloped dirt lots.  Things started picking up about 5-10 years later, and the homes eventually got built since then.  But the school district had a big monetary problem for a while, building this new school for nobody.

https://www.google.com/maps/@41.6509218,-88.3739072,15.5z

The way Chicago's exurban growth came to a halt after 2010 is pretty staggering.

True. The 2008 recession really exposed a lot of the underlying issues in Illinois.

3 words: unfunded pension liabilities

I think you meant: flat, flatter and flattest