Quadrant development at standstill

Washington's largest homebuilder, Quadrant Homes, has stopped building and selling new houses at one of its developments, at least in part because of slow sales.

Quadrant's move to halt work at The Ridge at Gig Harbor, a 120-lot project, may be the first work stoppage at a major subdivision in the Puget Sound area since the housing market turned south last year, several industry officials said.

It's another sign of the downturn's severity, they added.

Construction at the Gig Harbor development began last year. Streets and utilities are in place, and about a dozen houses have been built or are under construction.

Quadrant President Peter Orser characterized the Gig Harbor decision as "a suspension, not an abandonment," and said it would be temporary. The company has suspended work on developments at other times during his 21 years with the company, he said, "but probably not to this degree. ... "

"This is significant, no question about it," Orser said. "But the times we're in are significant. ... All of those headlines we've been reading are coming due and having an impact on everyone — from the people who make airplanes to the people who make lattes."

Orser said he hopes the regional housing market turns around in the spring.

Quadrant, a Weyerhaeuser subsidiary, has 16 other subdivisions under development in Western Washington, including Snoqualmie Ridge and Redmond Ridge East in King County. Sales and construction activity at all those sites continues, Orser said.

But the number of houses the company builds each day has dropped from seven last December to three this fall. In September, the company laid off 45 employees.

Orser said slow sales was just one factor in Quadrant's decision to suspend work at The Ridge at Gig Harbor. He declined to elaborate and wouldn't give sales figures for the subdivision.

Houses now under construction there will be completed, he said. Those buyers were offered the opportunity to back out, but all chose to proceed to closing.

Before the suspension, Quadrant was selling 1,500- to 3,100-square-foot houses in the development. Prices ranged from $259,900 to $342,900.

One buyer whose house had not been started said Quadrant canceled the sales agreement and refunded his earnest money.

"Technically, we're not out anything, but we're disappointed," said the buyer, who asked that his name not be published. "It's a fantastic location. We were excited about living there.

"In Gig Harbor, there's nothing in that price range. This is going to keep us renting for a while."

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said Quadrant's Gig Harbor move is "consistent with what we're seeing across the market as a whole." Sales of new and existing homes are down significantly.

"What Quadrant probably is saying here is that they needed to cut back on some of the subcontractors they were hiring to ensure the health of the company as a whole," Crellin said. "This project was probably the one they could most easily postpone."

Home sales in the Gig Harbor area haven't been noticeably slower than other parts of Pierce County, said Mike Crowley, executive vice president of the Master Builders of Pierce County.

If anything, expansion of the Tacoma Narrows Bridge has made the area more desirable, he said.

Building permits for new single-family homes in King and Snohomish counties have dropped more than 40 percent since last year, said Allison Butcher of the Master Builders Association of King and Snohomish Counties.

Eric Pryne: 206-464-2231