'Betrayed by our builder'

The San Jose Mercury reports:

A red banner stretches across the block wall encircling Paseo West, beckoning bargain hunters into the brand new subdivision a 90-minute commute from Silicon Valley: "Anderson Homes AUCTION, 34 New Luxury Homes MINIMUM BIDS from $285,000."

This is not one of the auctions of distressed homes in foreclosure that are becoming commonplace across the country. This is an auction of brand new homes in a subdivision (an inventory closeout! 40 percent off asking prices!) - a kind that's hardly been seen in Northern California since the last real estate bust in the early 1990s.

One-third of the houses in Paseo West will go on the auction block Saturday - houses that are sitting eerily empty in tidy rows along newly paved streets, houses that wouldn't sell even though Anderson Homes cut prices by $100,000 and offered free granite countertops and big screen TVs with surround sound.

"What was that movie? 'Pleasantville?' Where everything looked so nice?" a man within the walls of Paseo West asked. "It's like that," he said, then paused. "But no one lives here."

It may seem that way. But when the windy autumn days turn to night, lights flip on in two dozen scattered houses in Paseo West. There, anxious homeowners, many of them Silicon Valley refugees, are staging a revolt. They've met in living rooms. They've pointed fingers in the faces of Anderson Homes executives. They've signed a petition. They've

cried.

Fearing the auction will turn their $600,000 houses into $400,000 houses or worse, the homeowners - like customers who spent $600 on the first iPhones - are demanding rebates.

"It's going to leave us - I can't say anything but - in the gutter," said homeowner Joseph Leon.

This is sad story for those who bought way overpriced real estate.You might want to read this one.