Real estate slump hits contractors

Local subcontractors are among the victims of the current mortgage crisis, some of them filing liens against property owned by local developer Syncon Homes.

Dana Linehan of Tri Valley Plumbing said Syncon owes them money.

Tri Valley is now being sued by one of their suppliers, but can't make those payments until they're paid by Syncon.

"They paid us in a timely manner from 2003-05, but we started having problems in 2006-07 and now, they haven't cut us a check for four or five months," Linehan said. "I've been calling them, but they aren't returning my calls."

Mike Hansen, division manager of Gale Building Products in Reno, said his company has written off hundreds of thousands of dollars from some Reno developers, but Syncon has done well with respect to payments.

"Other builders are in much worse shape," he said. "Builders have to understand their finances better. For awhile, they were selling homes as quickly as they built them and at that point, they didn't have to understand finances."

Syncon spokesman Mike Lemke said market conditions are the primary obstacle. The company is downsizing operations in response to current market conditions and working to resolve any outstanding payments.

"Absorption rates reflect the slow-growth economy but our active neighborhoods are available and open to new families," Lemke said. "We are excited about a few new product lines in the works."

Home prices in 20 U.S. metropolitan areas dropped 10.7 percent for the 12-month period starting January 2007, a sign the housing recession is deepening, according to the S&P/Case-Shiller home price index.

Home prices for the month of January fell 2.4 percent, following a 2.1 percent decline the prior month, Case-Shiller said.

Price declines will continue as foreclosures add to a glut of unsold properties and stricter lending rules make it harder to get financing, according to a report by RealtyTrac.

Nevada continues to document the highest foreclosure rate among the states, with one in every 165 households receiving a foreclosure filing - more than three times the national average, according to RealtyTrac.

A total of 6,167 Nevada properties filed for foreclosure during the month, up 1 percent from the previous month and up 68 percent from February 2007.

California registered the nation's second highest state foreclosure rate in February, with one in every 242 households receiving a foreclosure filing during the month. Florida registered third, with one in every 254 households receiving a foreclosure filing during the month, according to RealtyTrac.

• Susie Vasquez can be reached at svasquez@recordcourier.com or 782-5121, ext. 211.