Another Builder Goes Belly Up

According to a story today in the Oregonian, the soft real estate market has claimed another victim, local builder Tony Marnella.

"Clackamas County homebuilder Tony Marnella and three of his companies filed for Chapter 11 bankruptcy earlier this month.

Landing Development LLC, 550 Investments LLC, Tony Marnella Inc. and Marnella collectively owe about $24 million, the bulk of it to two lenders -- Sterling Savings Bank and MW Housing Partners III LP, an affiliate of timber giant Weyerhaeuser."

""One of my biggest frustrations right now is the amount of FUD (Fear, Uncertainty and Doubt) being generated by the media about the state of the current real estate market and the local economy," Marnella said in a March 20 post.

"In my opinion, there is a lot of misinformation and a failure to acknowledge the positives about our local real estate market.""

Right, it's all the media's fault. It has nothing to do with people actually needing a real down payment, and being required to take out loans where you actually pay back some principle, not just some of the interest. And it also has nothing to do with an overpricced market that probably made him a lot of money over the past few years.

"It's true that the Portland area remains vigorous relative to the weakness in much of the rest of the country. But the market in the area has slowed, as Marnella's own numbers show.

Marnella's various companies brought in $4.3 million in revenue in 2006 and $1.1 million in 2007, according to the bankruptcy filing. So far in 2008, the companies have generated revenue of $10,000."

Maybe you should have done something when your revenue dropped by 75% last year, and tricked to basically zero this year. But nope, you're committed to building more homes that people don't need and can't afford. Smart.