As economy stumbles, sprawl developers find it harder to move their product

The last week has been unbelievable for the American economy.  The events of just yesterday were dizzying and awful.  And of course it's been brewing for a while now, starting with foreclosures and quickly followed by the sharp hikes in fuel prices, including gasoline; now the virtual collapse of Wall Street.

Outside of Wall Street, some of the hardest hit by economic turmoil have been developers committed to large houses in sprawling locations.  Not many consumers want their product anymore, and not many can afford it, either.

The latest evidence to come across my personal computer screen comes from Plainfield, Illinois, in Will County, about 40 miles from the Chicago Loop.  "Ground zero for sprawl," one of my friends calls it.  One of the new subdivisions around Plainfield is Chatham Square, developed and offered by Gladstone Homes, and featuring houses from 3000 to 4000 square feet once priced at over half a million each.

Not any more.  Those prices have come down.  And, more recently and astoundingly, Gladstone has further sweetened the deal by offering the following to purchasers of the higher-end Chatham Square products:

• $75,000 worth of free upgrades
• A gasoline card worth $2000
• Developer-paid utility bills for five years - AND
• A 2009 Toyota Prius

A Prius!  Presumably to soften the blow of the long commutes residents of the development will have to bear.

Last December, Gladstone also reportedly slashed its prices in nearby North Aurora by a hundred thousand dollars, not exactly chump change, either.  This really upset at least one Chatham Square resident who had already bought in to the "luxury" subdivision and who saw the developer's action as likely lowering his own property value and, no doubt, attracting what might be the wrong kind of neighbors.

Wow.  Unless I'm misreading something, that's somewhere around $100,000-$125,000 worth of discounts and incentives on Gladstone's properties.  They must be desperate to stop the bleeding.

Thanks to Ron Thomas for pointing me to this story.