Summerhouse on Everett Bay, Holly Ridge (Charlotte, Arlington: bank owned, appointed, for sale)

[NCGT]

Does anyone own a lot in this subdivision? I'm curious to know what the status of the HOA is. I'd also like to know if the boat docks are going to be constructed.

[jfgruner]

The community is built out and it's in great shape. There's only one home in the community currently under construction though as most of the lots were originally sold to investors. The HOA is still in tact, however it will be something to keep an eye on if the number of foreclosures in the community rises.

The 10 boatslips on the ICW have been completed and are really well built. The small craft launch into the creek has also been completed.

This place has the potential to be a great community and if you're able to find a good deal on a homesite and have the patience to wait for the community to develop there is a lot of potential here.

[MTNesters]

I'd exercise caution - here is the headline from the Charlotte Observer on May 17, 2009:


Charlotte-area developers face mortgage fraud accusations

Lawsuit accuses area developers of involvement in deals where allegedly inflated home prices left buyers in a bind.

Here's the link for the full article:
Charlotte-area developers face mortgage fraud accusations - CharlotteObserver.com

[NCGT]

Thanks for the info. I was primarily concerned about the HOA so it's good to know that it's still intact.

And yes there's gonna be lawsuits. There was all kinds of fraud taking place in that subdivision.

[cstanmeyer]

I am the unfortunate owner of a lot (i.e., I'm one of those who was defrauded.) Any idea how many of the lots are currently in foreclosure/bank owned/short sales?

[NCGT]

I'm estimating of course but I'd say that about 150-200 lots have already been foreclosed on and that number continues to rise. There have been 19 foreclosures since the first of this year. The foreclosures that are being offered for sale by the banks are setting the property values for the subdivision and there are dozens of lots for sale for $50,000 and less. The are over 100 lots currently listed for sale in the MLS and nothing is selling. There have been just three closed sales in the past 12 months, all of which were foreclosures and the most recent sale was a lot on the big lake that sold for $48,000.

I was considering a purchase in Summerhouse simply because some of the banks are trying to dump lots for as little as $15,000 which appears to be a bargain, and it is if you intend to build a house there. However, Summerhouse is literally going to take decades to get built out. There are 1032 home sites and only one home has been constructed. With the enormous amount of vacant lots available for purchase, to buy a lot as an investment is still risky even at $15,000 because you'll have to pay monthly HOA dues and insanely high property taxes for years (I'd say 5 years minimum) before you'll be able to sell the lot for say $50,000. The other problem is that all of the foreclosured lots are not generating HOA dues which may eventually put the HOA in a situation where it can't maintain the pool, clubhouse, ect and then that really crushes the property values even more. The biggest problem I see right now is the home size restriction that the covenants require. I don't know what the minimum size is but there is simply (and never was) a market for $400,000+ homes in Holly Ridge. Ultimately I decided against buying a lot there even at $15,000 because I just don't think the subdivision is going to recover.

[garinzo]

We were just down there this past week, and there was no mention of any lawsuits or foreclosures. In fact, both there and at Cutter Bay, which is another of their developments, we were offered lots in the $160K to $250K price range. Who has listings of the foreclosed properties? Do the local realtors have them yet, or are the banks still holding them?

[jfgruner]

Local Brokers are handling most of the foreclosures in the Neighborhood. Any realtor should be able to pull you a list of lots for sale. I just pulled it and there are a couple short sales listed at $20,000 and a few lots selling outright around $45,000. Based on what I've seen, if you find a good realtor who knows a little bit about the community they should be able to get you a good lot for under $40k, just my opinion.

[NCGT]

Originally Posted by garinzo

We were just down there this past week, and there was no mention of any lawsuits or foreclosures. In fact, both there and at Cutter Bay, which is another of their developments, we were offered lots in the $160K to $250K price range. Who has listings of the foreclosed properties? Do the local realtors have them yet, or are the banks still holding them?

That is simply shocking.

[NCGT]

Here's a news article that kind of sums up the situation in Summerhouse.......




When the high tide of the Carolinas' coastal development boom drained away, thousands of empty lots left behind started sprouting weeds. Now, some are sprouting lawsuits, too.
More than 130 people, mostly from Virginia, who bought lots -- including dozens of teachers and administrators from the Fairfax County, Va., school system -- have sued, and a Charlotte lawyer is about to file a suit on behalf of 45 more buyers in what could become one of the largest mortgage fraud cases in state history.

• They say a Virginia investment company called Total Realty Management hoodwinked them into paying prices that had been artificially swollen by fraudulent appraisals. Some of the inflated appraisals, they claim, were built upon multiple fake sales of the same lot. The buyers also are suing a major developer based in North Carolina, its marketing wing and several banks that were involved in the land sales.

"It was kind of a real estate version of the Madoff scandal," said S. Jill Pisner, a lawyer for some of the buyers.
Once her law firm in McLean, Va., had signed up 129 clients who had bought about 100 lots, it had to stop taking more. A handful of others hired two other Virginia law firms, and a Charlotte lawyer plans to file a fourth suit this month.
The North Carolina subdivisions -- Summerhouse in Onslow County and Cannonsgate in Carteret County -- were created by R.A. North Development of Charlotte. Cannonsgate is the subdivision where former Gov. Mike Easley got a controversial deal on a waterfront lot. Easley had earlier appointed Randy Allen, the owner of R.A. North, and his brother, William, to the N.C. Wildlife Resources Commission.
Easley bought his lot directly from the developer and is not a party to the suit. R.A. North is, though, as is Southeastern Waterfront Marketing in Charlotte, which is owned by William Allen and markets the developments. Another company Allen owns marketed lots at Craven's Grant in South Carolina, which was built by another developer who is also being sued.
The buyers are seeking more than $100 million in damages and most are also claiming that they have the right to walk away from the deals, according to the lawsuits. Lenders, including embattled Bank of America, are not only defendants in the case, but have started foreclosing on some of the lots and could eventually be left holding tens of millions of dollars in bad loans.
Many of the lots were sold to the final buyers at prices more than twice the market value, according to the lawsuits filed so far, which are in federal court in Virginia. Some cost more than $500,000.
Selling and reselling
Records from the Carteret County Register of Deeds office show that Total Realty Management bought and sold some Cannonsgate lots several times, with the appraised value rising rapidly. The lawsuit says TRM was selling the lots to buyers it had recruited to pump up the price, then buying the land back. Eventually it sold the lots for sometimes more than double the price that lots around it were selling for on the open market.
Deeds indicate that in some cases TRM traded a given lot back and forth with people who had the same names as TRM company officers. Records in both counties show that TRM was involved in transactions on about 230 lots at the two North Carolina subdivisions, about 200 of them at Summerhouse.
The lawyer listed in court documents as representing Total Realty Management, Martin Yeager of Arlington, Va., hung up before it could be explained why a reporter was calling.
"I've got no comment for you," he said. He did not respond to a follow-up e-mail.