5 Paragraphs, and the entire picture of the sick man that is US housing is laid bare.

Salton City: A land of dreams and dead fish

New homes and old optimism continue to sprout in a desert community that hasn’t really jelled in 50 years.
By David Streitfeld
Times Staff Writer

July 1, 2007

SALTON CITY, CALIF. — This lakeside hamlet is about as remote as you can get in Southern California and still have plumbing and pavement.

Nestled on the western shore of the Salton Sea, the town doesn’t have a supermarket or movie theater or drugstore. But it has as many as 250 homes for sale, most of them newly built — a huge supply for a place with just 1,440 people.

When real estate values began soaring a few years ago, builders flocked here. Summer temperatures might hit 115 or even 120 degrees and the sea may be too sickly for swimming or sailing, but land was cheap. Builders figured that people priced out of Los Angeles and San Diego would discover Salton City and the other towns in Imperial County.

Now, with home values sliding, mortgage rates edging up and gasoline prices on an upward trend, that assumption appears premature at best. Imperial County, at least for the moment, seems a subdivision too far.

“Builders are like lemmings. They saw a few of their peers going to Imperial County and they all joined in,” housing consultant Patrick Duffy said. “They didn’t do market studies. They just crossed their fingers.”

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Emphasis mine.