Tract house builder C.P. Morgan officially bites
the dust today. Which raises plenty of questions:
--Has anyone else been more influential in the type of housing stock built in the Indianapolis area in the past decade than Chuck Morgan? If so, who?
--How did C.P. Morgan manage to convince so many buyers that value is measured by the greatest square footage for the least money? Why didnâ??t other builders rise to dominance by showing the value of higher-quality construction or larger lot sizes?
--What will become of Morgan neighborhoods, many of which are little more than rows of poor-manâ??s drywall castles? Will they, like tail fins, be viewed as vestiges of a super-sized America? Or will they, as was the case through much of this decade, be sought out for the sheer room for the buck? A related question: Will Morgan houses ever attract urban pioneers of the distant future? Why?
--Will another company take up the marketing mantle of building the most house for the least money? Who?
Surely you have thoughts.
--Has anyone else been more influential in the type of housing stock built in the Indianapolis area in the past decade than Chuck Morgan? If so, who?
--How did C.P. Morgan manage to convince so many buyers that value is measured by the greatest square footage for the least money? Why didnâ??t other builders rise to dominance by showing the value of higher-quality construction or larger lot sizes?
--What will become of Morgan neighborhoods, many of which are little more than rows of poor-manâ??s drywall castles? Will they, like tail fins, be viewed as vestiges of a super-sized America? Or will they, as was the case through much of this decade, be sought out for the sheer room for the buck? A related question: Will Morgan houses ever attract urban pioneers of the distant future? Why?
--Will another company take up the marketing mantle of building the most house for the least money? Who?
Surely you have thoughts.
Back to Top
IBJ Conversations
32 Comments
Add Comment
I'm glad you can throw out a blanket claim to know what size of home me and my family needed. 5 years ago when mortgage rates were low (5.5% fixed), my family felt like a CP Morgan house would be good for us to start out with. We never made plans to make this our only home, but with a new family, 2,000 sq. ft. made perfect sense, and it was about $20,000 less than a similar development down the road. We knew it wouldn't appreciate more than 1 to 2%, but we COULD afford this payment and liked the area. As a 20 yr old buying a house, we did our homework and didn't buy a house bigger than our budget.
It's true a lot of people in CP Morgan type houses got roped into bad mortgages, but there are also a great majority of us, that knew how to make this a good purchase for our families.
We all can't live in brick houses in Carmel and CP Morgan provided a semi-decent product for us.
Let me just say that I am not a huge fan of CP Morgan, but I do think the reason they were so successful was that they filled a niche and no one else was able to emulate their success. Their problem, IMHO was a) the type of buyer they attracted were more prone to foreclosure and b) the types of financing they (or their preferred lenders) pushed encouraged fiscal irresponsibility and led to a wave of foreclosures in their neighborhoods. Then the value of the homes in these neighborhoods suffered as a result and the spiral began. This reputation finally caught up to them in conjunction with tougher lender standards, and the elimination of seller paid down payment and poof they are done for.
Other builders can't sell larger lots and higher quality construction at that price range because although buyers may value this, at this price point they would sacrifice these thing ILO more rooms and square footage.
Who knows what will come of their neighborhoods, but inevitably some builder will pick up the lots at a price that makes sense and they will build them out. It may take some time, but it will happen.
In the short term, this is a terrible thing for a variety of reasons, but in the long run I think we will be better off without CP Morgan around.
Now, why did they rise to prominence? Great marketing, fueled by a political pressure applied to other organizations (I'll leave the pure political party blame out here) to create financing for higher risk individuals.
There will always be buyers for these houses at a price that will reflect the market. If the potential buyer feels it is less than the seller, it won't sell. If they reach an agreement, then that is the value of the property. A house is a purchase, not a guaranteed investment. Even though historically houses have appreciated in value overall, there have always--and always will be--houses and neighborhoods which do not follow the average. In this case, the CP communities may be the ones that bring down the mathematical average.
Sooner or later, and probably sooner than later, someone else will step in and service this market of those who want more space for less money. It is a legitimate combination for legitimate reasons. The question of creditworthiness of each individual buyer must be sorted through, but the market exists and it will be served.
You wrote, As a 20 yr old buying a house, we did our homework and didn’t buy a house bigger than our budget.
Purchasing a house at 20 years old? 2,000 square feet? You must be making some good dough and put a lot away in savings already. Did you have to put any money down? This is part of the problem. The market became flooded with young buyers who were promised more home and no (or very low) down payments. They made people believe that home ownership is a right. Sure, it's part of the American dream, but the dream can wait. It's sad to see the number of foreclosures in the vinyl neighborhoods. Broken dreams and a recession to boot.
They won't be standing in 20 years.
So, just because you pay a lot doesn't mean you may get the best quality. If you don't know what they're using, you don't really know the true cost and/or the quality. This is why I agree with Joyce, that poor construction began long before C.P. Morgan. I'm not saying all builders out there do this... I'm saying that if you think C.P. Morgan was the only one, you are very naive.
Homeowners who can't afford their house payment certainly can't afford upkeep on such a big home.
My house is brick and was built in '64. Unlike my co-workers who complain that their 2004 homes sound like they are going to fall apart during a storm, I didn't notice that we had a storm.
Your assumptions about homes built in the era of Firewoman are much overstated. While you make some good points about construction methods, you cannot make a blanket statement for all homes built in that era to be true. You also would lead someone to believe that the homes in your era won't need updates down the road due to further technological improvements. Give me the inherent craftsmanship of a Broad Ripple bungalow any day over the expanse of space in a CP Morgan box with their cut rate materials and low quality.
Oh, and by the way, did you graduate from grade school spelling? Do you always put all your statements in one paragraph? Perhaps you should take a breath in your next rant.
realator
and holy crap! i agree with berwick guy again?! :lol:
One more agreement and we ARE going to have to have that beer!
Sorry, you are so wrong. Perhaps a custom home builder will note how they don't use pine lumber everywhere. My custom home was built using no particle board, rather tongue in groove oak planks, how about your CP Morgan mansion? You may think you know it all, but perhaps you should ask the experts. I don't profess to know anymore than I do, but I do know that you are comparing apples and oranges with quality, custom home builders. Check it out before you throw and any more smartass cracks.
i am always up for a beer. cory owes me anyway. :lol:
Floor and roof decking and exterior sheathing is generally diagonal pine 1-by lumber. Flooring is oak tongue-and-groove Interior walls have wood lath with plaster. Doors and windows are wood. Trim is wood. Many are brick or stone partway or all the way around.
The interior materials are indeed better than today's production homes, and there's not a single sheet of plywood anywhere unless something has been remodeled or the roof re-decked.
Wow. I agree with Firewoman, BerwickGuy, and DaHooey all at once.
As an owner of a 1930's brick English tutor, I expect problems with evenly heating/cooling the home (we have to close a vent in the attic buildout or it will take most of the heat in the home...and no central heat in the finished basement) and we make modifications. I even expect problems with plumbing as I have to replace the old tile pipes with the PVC or whatever it's called (I'm no expert). I was surprised, after talking to another coworker, to hear that her 8-year-old home has horrible heating problems; when she sets the house at 62 degrees she gets 75 degrees upstairs and 58 downstairs...I would have thought they would iron out those kinks in 80+ years of experience from the time my home was built. Along those same lines, new build homes with better insulation have heating bills higher than my home with original leaded glass windows and wood window frames (ie lacking in insulation). And I would put my all-brick construction up against any vinyl house in the city, custom or not, CP Morgan or not.
Lastly, I can assure you that I bought my home giving thought to the neighborhood, most of all resale value...very few foreclosures in the square few miles around my home; and appreciation year after year (with exceptions, of course, of recessions or whatever we're in right now...which is to be expected).
What inexperienced buyers don't realize, among other things, is that if you purchase a home for 150k, and you expect it to simply retain it's value (zero appreciation), you still won't be able to afford to sell it at 150k a few years down the road--realtor costs, closing fees, buyers request for repairs, etc. It has to appreciate just to break even.
And as a disclaimer, I was a first time homebuyer...I just did my research. And I'm proud of my smart investment.
C.P. Morgan: More Square Feet, Less Wood.