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Huge Supplies of Pre Foreclosures for Sale Hit Builders' Confidence

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By : John Cutts    99 or more times read
With pre foreclosures for sale and distressed home supplies maintaining their high numbers in Birmingham, Alabama, most home builders believe that the outlook for the house construction market in 2011 will be much the same as last year not very good. According to the National Association of Home Builders (NAHB), the confidence index of the sector remained at 16 as of January, the third month in a row that the index is at this level.

The trade association reported that an index of at least 50 will indicate optimism among house builders. However, huge supplies of Birmingham foreclosures are preventing the index from climbing higher than 16. The NAHB stated that lack of home building financing and difficulties in getting accurate housing appraisal values are affecting home builders' ability to get ready for any anticipated uptick in the home buying market.

Aside from Alabama foreclosures, builders also cited the continuous downturn in the nationwide economy and the high unemployment rate as factors limiting the chances of home building to mount a sustained recovery. They also stated that both home builders and consumers are waiting to see whether any improvement in the economy and the job market will happen during the year before they make any move.

With pre foreclosures for sale competing with new houses, house construction in the metro area continued to hover at its lowest level recorded since the start of the housing industry crisis. The latest figure shows that housing permits dropped in November 2010 in Birmingham to 50 from a total of 63 issued in October. In November of 2009, the number of home building permits issued reached 109.

Despite the high supplies of foreclosures for sale, builders are expecting a slight improvement in new home permits for December 2010, data for which will be made available in the coming weeks. They also reported that interest in new dwellings from prospective buyers seemed to have improved in January, in anticipation of improvements in the job market.

However, most home builders stated that the new housing market will not fully recover until supplies of residential foreclosures and pre foreclosures for sale diminish in the area. They stated that obstacles to credit acquisition should also be eliminated for the housing market to improve.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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