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Bank and Government Foreclosure Hinders New Housing Sales

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By : Dywon Erick Dylon    99 or more times read
Last year, sales of new residential properties hit an almost record low in some areas of Texas. According to analysts, the huge supplies of bank and government foreclosure residences are part of the reason for the poor sales performance of new dwellings in 2010.

Analysts stated that foreclosed homes for sale in Lubbock, TX, and in the rest of the state are competing against new houses in a time when homebuyers and residential property investors are almost non-existent. This is apparent in areas like the Waco-McLennan County, where 2010 marked the second worst performance year for new home sales, second only to the 1959 level. The decline in the sales of new dwellings in the county was estimated to be at the range of 50 to 60% last year.

Economists stated that, with Texas foreclosed homes for sale continuing to rise, more home builders are being put out of business and, consequently, more jobs are lost to the region. They stated that, as sales of new houses decline, less home building projects are completed and more people lose their jobs. The trend affects several sectors associated with the residential property market, including home builders, contractors, and suppliers of construction materials.

Furthermore, the small number of buyers willing to brave the homeownership market will more likely purchase cheaper residences, such as bank and government foreclosure properties. Their fear of losing their jobs and not being able to meet their monthly loan obligations are turning them away from new houses that are often priced higher than foreclosures, analysts have added.

The impact is greatly felt among up-scale subdivisions where luxury houses and higher-end dwellings remain unsold for months, with foreclosed homes grabbing the attention of the limited number of prospective buyers and real estate investors. To be able to cope with the current market condition, most home builders are turning their backs on luxury dwellings and are focusing more on building low-scale residences.

According to home builders, this will not give them a lot of returns, particularly because they are also forced to compete with lower priced bank and government foreclosure properties. However, they stated that it is better than building high-end residences that no one would buy anyway.
Original post: on, your source of foreclosed homes.

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