Extreme Home Debacle
July 29, 2008
The Associated Press is reporting that a family featured on the ABC show “Extreme Makeover” in 2005 has had to enter foreclosure on their house. They had apparently used the home as collateral for a $450,000 loan intended to serve as startup capital for a new construction business. My first reaction was, “How dumb can you get?” But then I got to thinking.
Let’s face it, these folks weren’t the only ones taken unawares by the extreme housing downturn that has befallen the U.S. this year. Back in 2005, a new construction business probably looked like the perfect opportunity to take advantage of great market conditions. With 2008 hindsight, though, yikes. Those people never really had a chance.
The housing decline has spread to Great Britain as well, where Wienerberger reports a slump beginning in April. The German brick maker plans to close a number of smaller, underperforming plants in struggling regions this year and undertake expansions in areas that offer greater growth potential. While projecting lower-than-anticipated revenues for the first half of 2008, Wienerberger sees regions such as Bulgaria, Romania, Russia and Poland as growth drivers.