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High Levels of Foreclosures and Bankruptcy Homes Hit Housing Starts



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By : John Cutts    99 or more times read
The huge number of foreclosed residences and bankruptcy homes in North Texas hindered the growth of the new housing market in the 2010 fourth quarter according to area housing data. Builders in the region gained optimism during the first half of the year when demand for new houses increased, but the year finished with a poor showing from the new home market.

With housing sales also down during the quarter, the few buyers who ventured into homeownership and residential investment favored the cheaper properties offered at foreclosed Fort Worth home auctions and other foreclosure sales in the region, causing housing starts to drop in the last quarter of the year. A total of 3,341 houses were built by North Texas builders in the October-December period, according to housing market data.

Housing unit sales also dropped in the three-month period, including numbers for newly built dwellings and properties offered at home auctions in Texas, with total sales recording a 20% decrease compared with the same quarter of 2009. Analysts stated that the decline in both sales and housing starts showed that the region's housing market remain weak despite the help it got from the federal government's tax credit initiative during the first six months of the year.

Housing experts have stated that the primary reason is the huge supplies of foreclosed dwellings and bankruptcy homes in the region which dampened potential buyers and investors' interest in new houses. They predict that the trend will continue in 2011, but are optimistic that numbers will improve within the year as the job market of North Texas continues to stabilize.

They also stated that the low inventory level of homebuilders will help the market stabilize and will somewhat offset the effect of foreclosed properties at home auctions in 2011. Compared with the peak period of 2006, housing starts in the region were almost 70% lower.

The 2010 fourth quarter also marked the lowest three-month period for the area in terms of homebuilding activities in almost 20 years. Analysts are predicting a modest rise in homebuilding activity in 2011 ranging from 10 to 15%. They also expect housing starts to be able to compete better against foreclosures and bankruptcy homes in 2011.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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