Flippers sue Pulte

“Jason Beaver of San Francisco followed some untimely advice from a friend who’d made a hefty profit flipping homes in Las Vegas.

He paid $350,000 for a three-bedroom, 1,500-square-foot new home in the Solera subdivision of Anthem last September, just weeks before the builder, Bloomfield Hills, Mich.-based Pulte Homes, lowered prices in several communities across Las Vegas Valley.
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Pulte and a handful of other builders had to lower prices in response to an increase in inventory, which had slowed demand for new homes and curbed runaway appreciation rates that led the nation for the second and third quarters.

The business decision sparked a class action lawsuit from people who closed escrow on Pulte homes between Aug. 1 and Oct. 1, about two-thirds of them investors. Pulte cut prices by as much as $100,000 on Oct. 2.

Beaver’s home dropped in price to $280,000. He’s unable to cover his mortgage with the $995 monthly rent he collects from the home.”

Clearly this is the wave of the future. Frustrated flippers will turn on sellers in an attempt to recover their losses. This could be bigger than asbestos or tobacco for the plaintiff’s bar.

The “for sale” inventory in Las Vegas MLS has grown from 16,346 on May 24 to 19,969 as of yesterday.