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The Issue with Chinese Drywall

The Issue with Chinese DrywallChinese Drywall

Chinese drywall was imported to the US during the peak building years of 2004 and 2007. Over 100,000 homes, in 20 states, were built with this product. The drywall contains a sulfurous product, that gives off the odor of a burning match. Over time, it turns copper pipes black, rots wiring, and plumbing, and destroys the air conditioning condenser.

The Issue with Living with Chinese Drywall
More importantly, this product is harmful to people living within those walls. Many have reported that the odor is causing headaches, and respiratory problems. Numerous people have move out of their new homes, only to have to pay for another home or apartment to live in.

The Issue with the Mortgage Lenders and Chinese Drywall
These displaced folks cannot afford rent on an apartment, and the mortgage on their new home. And, pleas for aid from the mortgage lender are being declined. The cost of replacing all the drywall in the home can reach $80,000 to $100,000. Is this the beginning of more mortgage lender problems? How many people will just walk away from their homes, leaving the industry in another downfall?

The Issue with the Courts and Chinese Drywall
As of right now, there are court cases pending to for home owners hoping to resolve this problem. Many of the new home builders are taking it upon themselves to replace the defective drywall. But many are not, and the courts will start trying those cases in January of 2010.

The Issue with Our Economy and Chinese Drywall
This issue has the potential of causing another run of foreclosures and bankruptcies. The state of Louisiana has begun using their $5 million in federal housing money to assist homeowners with replacing the offensive drywall. Senator Bill Nelson (Dem-FL) is introducing a bill to provide the same type of assistance for Florida residents.

Where will this go? How will we deal with this large problem on top of our small recovery of the last year? Are you seeing the effects of Chinese drywall in your market?

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Marianne Snygg, GRI, ABR, ASP
Broker Associate
ERA Herman Group Real Estate

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Colorado Springs and Monument Real Estate

Comment balloon 5 commentsMarianne Snygg • October 27 2009 10:01AM

Comments

Marianne - The drywall issue is likely an issue we will be hearing much about in our future.  Some states were harder hit than others with this.

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) almost 10 years ago

Yes, this is an isuue we need to keep a close eye. I just hope there are not a slew of fraudulent claims that diminish the actual need for replacement of the defective stuff. Seems like this has the potential to spin out of control. Let's hope not.

Posted by Ian Niquette (Square One Home Inspection) almost 10 years ago

Myrl: I read and wrote that there were 20 states where this defective product was sold, but I haven't found out which states are in that 20. Do you know?

Ian: Gosh, what a bleak prospect. I've also heard that we're set for another round of foreclosures based on the mortgage default moratorium that was put in place at the beginning of the year. So, couple those two together, and my goodness, what a mess we'll have!

Posted by Marianne Snygg, ABR, ASP, GRI, SFR (ERA Herman Group Real Estate) almost 10 years ago

I read that Florida and Louisiana were hit hard, due to all of the hurricane damage that was repaired with defective sheetrock.  The insurance nightmares that have ensued are as scary as the defective product isssues!  Foreclosures due to this fiasco are sure to be a problem, soon!

Posted by c m almost 10 years ago

Oh, I know. It's scary, Cheryl, what could happen. However, I heard on NPR yesterday, and got an email from my broker today, about the gov't extending the first time home buyer credit, and adding a $6,500 incentive for home owners that have owned for 5 years. I could really use some excitment in the market. I'm still looking to close on two more properties this year!

Posted by Marianne Snygg, ABR, ASP, GRI, SFR (ERA Herman Group Real Estate) almost 10 years ago

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