C.P. Morgan aftermath

February 27, 2009
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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.
  • oh I have thoughts... I really didn't get the home building craze to begin with. It just contributes to the further generica-fying (for lack of a better term) of our metro area. I would much rather live in a normal sized home of solid contruction and character, then ever live in one of the many thousands of McMansions. It angers me that so many people subscribed to this way of thinking and bought bigger homes than they could ever need or afford and now we have to bail them out. The home builders played on these people's ignorance and are now suffering the consequences. I'm really sorry that people are losing their homes and their jobs, but people you've got to be smarter and look at the fine print, in addition, greed in the end will be your downfall (banks and homebuilders!).
  • Firewoman

    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.
  • –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 didn’t other builders rise to dominance by showing the value of higher-quality construction or larger lot sizes?

    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.
  • Every company closure is a loss, even if it was unethical due to those honest people who were employed there. As bad as Enron was, I doubt that the awareness of the problem ran all the way to the bottom of the organization. Their suppliers took a hit because of unpaid bills at the end--and the suppliers did nothing wrong. To be happy at anyone's demise is a sign of moral shortage and lack of financial comprehension on your part.

    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.
  • In reply to the poster Say Anything

    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.
  • What will become of Morgan neighborhoods, many of which are little more than rows of poor-man’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?

    They won't be standing in 20 years.
  • Mr. Heikens, your third question really speaks to me. It's a great question, and one I've pondered myself. The sheer volume of poorly constructed houses (each with its implied mandate to drive a car absolutely everywhere) is something that has always baffled me. Hopefully we have learned our lesson with regards to constraints to growth. The may be a great teachable moment for us.
  • I live in a 1970's addition in Beech Grove, and I can't say my house is built any better than my sister's CP Morgan home. I think poor construction started long before CP Morgan came around.
  • Yeah, I have to agree with Joyce. Just because someone paid more for a house, doesn't mean the quality is better. I've seen some expensive custom builders and production builders cut corners without the buyer knowing. Yet the buyer still thinks they're getting a high quality product, when they're actually getting the same thing as the C.P. Morgan buyer... just because they paid the builder more for it.

    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.
  • Say Anything, I don't live in a brick house in Carmel, I live in an 816 sf Bungalow near Broad Ripple. My house was built in 1926 and is nearly all wood. My house has weathered many storms in it's 82 years and I believe it will continue for another 80+ at least. Can you say the same for all the vinyl villages in the burbs? It's a wonderful first home that I've lived in for 5 years. I don't understand the mentality of many people who think they must have a huge new house right out of the gate. Growing up my family never even had a house that big and it was still plenty of room. It just seems that there is some sort of entitlement mentality and that bigger is better. Whatever happened to quality vs quantity?
  • These vinyl villages of McMansions will become the trailer parks of tomorrow should they stand the test of time.
    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.
  • In reference to the comments of firewoman. First, you may have been duped into buying a small bungalow in SOBRO, by a slick talking realator who I am sure laughed all the way to the bank. These vinyl villages you speak so lowly about, quite simply are built better than your home. All the homes built nowdays are. Materials and building techniques have assured that. Your home does not have tornado straps every two feet holding to the foundation. Your home does not come with the level of isullation homes come with nowdays, the wiring, plumming and foundations are infinately superior to what YOU seem to enjoy. And yes, while not the most pleasing visually speaking, even the vinyl siding is quite durable. Homes of your time period suffer from sagging foundations, leaking basements, frighteningly outdated wireing, and questionable plumming as well as small rooms and something small you like to say are closets. I have spent years looking at and studying builders, Beazer, Best, Harvard, Pulte, Centex, KB, Zeiring and the list goes on and on. There are thousands of people who bought these homes you dog, and are not suffering any problems and not in forclosure. I prefer bigger rooms and closets, it suits the way I live and the way alot of people live and want to live. I put crown and chair rail in the rooms and picture frames some walls, upgraded all lighting and doors as well as flooring. My house is 40% brick and yes vinyl on the rest. But you know what, that tornado back in May only hit a half block north of my house and I lost no sidding or shingles, despite winds of a hundred or more miles per hour. These houses will be around as long or longer than yours, the materials and construction techniques have assured of this, it is only a matter of maintenance as is your house. And in 10 years or so once the trees and landscapeing are filling in, it will look like any older part of the city, just not as cramped. Have a great day.
  • Indy6

    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.
  • hard to take anybody seriously when they write:


    and holy crap! i agree with berwick guy again?! :lol:
  • Da Hooey,

    One more agreement and we ARE going to have to have that beer!
  • Da Hooey, you mispelled (time) on your comment on the borders store closing. And Berwick, it may be a rant, but it gets old listening to the same morons bellow about things they are completely uninformed about. And your comment on these cut rate materials, shows how uninformed you are. The same white pine goes into all houses. The same electrical, ect. Does it make plywood a better product because it was put into a custom home? I agree that the space CPM homes offered was excessive, but the materials were the same as in custom homes. Anyway, on your comment about my rant, grow up. As long as you get the point, thats what matters. Tell that to your boyfriend Duh Hooey. Have a great day.
  • BerwickGuy, and Duh Hooey, where ever will you go for your beer???? Buckwildz closed.
  • INDY6:

    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.
  • My home has no particle board either. Pine is used for the framing of all homes, CUSTOM OR NOT. Wall studs are 16 on center for all exterior walls CUSTOM OR NOT. I dont live in a CPM home either. You need to perhaps ask the experts yourself. The quality you speak so highly about is for the most part on the finish out of the inside of your house, and something other than vinyl siding, THAT and only THAT is where your custom home has the advantage. Everything else is set to codes, plumming, electrical ect..ect.. whether you like it or not. I am not an expert, but I have built two houses, and as said before, have studied the construction of hundreds of others by walking through them. And they are all the same from TEXAS TO CALIFORNIA TO INDIANA, SO, get overyourself and think about your smartass cracks. By the way, RECHECK your last sentence, it's hard to take anyone seriously when they make errors. Not pleasant,is it ?!!!!!!
  • Oh, and by the way, you need not respond again. I am flying out in four hours to spend a month in SYDNEY. While I would like to humor myself on your response, and read another one of your rants, I have grown weary of the ignorance displayed by certain individuals and will not be responding to any comments. You and Duh Hooey and maybe even firewoman can all have a beer, and discuss life. I will be having my Victoria Bitter on Bondi Beach. Have a great month. XOXO
  • I had to doublecheck the URL. I thought I was reading comments off of the IndyStar for a sec.
  • lolz. indy6.

    i am always up for a beer. cory owes me anyway. :lol:
  • The issue is not really no money down.....many qualified people purchased homes iwth no money down....just like they purchased cars with no money down. The issue is these buyers were targeted, with specific marketing and lenders who were culpable , and pushed everything they could, all for the sake of money. CP had a very good internal engine, they were good at operating their business....they just got caught in relying on only buyers who needed them, those without places to go. As far as quality, most larger builders build homes with walls already built off site, it is more economical, and it is just as sturdy of a home. The real issue with resale is the product CP pushed was all about square footage inside, the outside looked like a tenement housing division....resale is all about location, value, and that is where CP failed. The high percentage of foreclosures in those neighborhoods will force many to throw in the towel as well, as unfortunate as that is.
  • Apparently INDY6 has never walked through or remodeled a house built before WWII:

    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.
  • Just a note.. when you are referencing someone who cares for pipes and leaks or waterworks in your home..they are called a plumber and they work with your 'plumbing not 'plumming' as a certain poster has repeatedly pointed out.
  • So... thundermutt, BerwickGuy, and DaHooey, how'z about that beer? I bet Indy6 is bringing a ray of sunshine to Sidney!
  • LOL Firewoman. Maybe IBJ will sponsor Blog Nite at the Rathskeller when the weather gets warmer?
  • I'm shocked to hear that a home with vinyl siding survived the tornados without any damage...because I have several coworkers who say that their siding was just ripped to pieces. Even in the hail storm--holes in their siding. Fortunately, my coworkers of whom I speak can afford to replace the siding--either with cash or through homeowner's insurance; however, that is not true for many of the people buying new build homes.

    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.
  • lndyfan-Pretty smart post-and sounds like a smart investment. The only mistake is tutor, which means a person that helps to teach someone. Your home is a Tudor, a lovely style of home patterned after the architecture in the time of King Henry VIII. His family name was Tudor. Still, great post, very informative.
  • C.P. Morgan: Building Tomorrows Ghettos... TODAY!

    C.P. Morgan: More Square Feet, Less Wood.
  • Could be...
    It could be that they were spelling how it sounded to them.
  • CP Morgan
    I lived in Charleston during Hurrican Hugo and saw million dollar homes demolished. The price one pays for a home is no indicator of what can happen to it surrounding natural disasters, good or bad constuction....
  • Who is held accountable?
    In 2009 we bought a C.P. Morgan house. We were first time home buyers, and really had no idea how serious of an issue a new home could pose. We have gone this long with really no serious issues, only cosmetic. Until we had some serious winds, and had some shingles ripped off. Well, we called our insurance company and they were very quick to point out the workmanship issues that were on our roof and quickly followed up on a threat to not renew our policy. So, what I am stuck with now is a dilemma. Our roof is only 6 years old...yet we need a new one. Why or how can it be my responsibility to fix something that never should have been an issue? I have checked the builder warranty,and it only covers something like trusses and rafters breaking. Seeing as we bought this house in a new state, of course we have no "roof" fund in place. I wonder what Charles P. Morgan is doing right now, as all of his little home owners stand around in a panic because we now realize he screwed us into homes that are total garbage.

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