Thursday Morning: Burned by Falling Prices in the Desert, Homeowners Sue Centex

Here's a new one: investors who bought upscale townhomes and villas in La Quinta -- where prices are now falling -- are suing the builder, alleging securities fraud.

From the Desert Sun: 44 investors who purchased properties in Legacy Villas at La Quinta are suing Centex Homes, asking for a cancellation of their purchase agreements to recoup $20 million to $25 million.

Falling prices: "Some investors who purchased in the first phases claim they can't refinance now because property values have plummeted. Villas that once sold for $775,000 have recently been selling for about $555,000."

More: "The suit alleges Centex marketed homes with promises that investors would reap profits under a rental agreement managed by La Quinta Resort & Club. But because of construction delays and a long list of other "misrepresentations" and problems, investors claim they were stuck with charming Spanish-style villas that they weren't able to rent out."

Eric Bruner, a spokesman for Dallas-based Centex Corp., said, "We are not going to discuss any matter under litigation."

Photo Credit: Worldgolf.com
Thanks for the Link: the Housing Bubble Blog

Palm Springs Gets The New York Times Treatment

Realtors and builders in Palm Springs must be very happy with this New York Times story over the weekend celebrating the area's rise as a year-round place to live. Highlights:
-- "An increasing number of home buyers are turning the desert city into their primary residence."
-- Who's Buying? "An influx of young buyers from neighboring Los Angeles and Orange Counties, with most of them finding work in the growing financial-services sector."
--Why? DataQuick reports the median home price for Palm Springs was $407,000, versus $540,000 in Los Angeles County and $630,000 in Orange County.
--But Isn't It Really Hot? Yes. "Temperatures can rise to 120 degrees, causing dashboards to pucker and the Desert Regional Medical Center’s emergency room to fill with cases of heat exhaustion — mostly from overzealous yard work."

Photo Credit: www.palmspringshomebuyer.com