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Government Homes for Sale Weighed Down New Homes

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By : John Cutts    99 or more times read
The new home construction market of Indiana performed poorly last year, according to realtors. They attributed the slowdown in housing starts activities to the huge number of foreclosed bank and government homes for sale competing with new dwellings for investors and buyers' attention.

For those who made home purchases last year, majority opted for foreclosures offered at Indianapolis home auctions and other auction sales in various areas of the state. The Builders Association of Greater Indianapolis reported that 2010 marked the worst period for home building in the region in over 25 years. In central Indiana, permits for new homes totaled 265 last December 2010, down by 5% when compared with the 279 permits issued in December 2009.

Cheap residential properties offered at home auctions in Indiana have been largely blamed for the decline in new housing projects in most of the state's local markets. In Hamilton County, considered as one of the most favored areas for new houses in the state, housing construction permits dropped by 1% last year, reaching a total of 1,354.

The decline in the number of residential construction permits is almost the same in most markets with huge supplies of foreclosed bank and government homes for sale. In Marion County, permits issued dropped to 729 last year from 772 in 2009. The total number of permits issued last year represents a considerable fall from the 2005 total, when 3,600 permits for new houses were issued in the county.

Another data cited by local market analysts demonstrates the impact of foreclosure homes auctions on new houses. Demand for single family dwellings traditionally accounts for 80% of the national residential property market. However, last year saw demand for single family residences declining by 9%. Demand for apartment spaces, however, climbed by 17.9% nationwide in 2010. The Midwest region of the U.S. posted the highest decline in home construction numbers, with activities declining by 38.4% in 2010.

Despite the national and local decline in housing starts, analysts stated that there is hope for the new housing market. They reported that construction permits for new residences jumped in December by more than 16%, giving hope that new dwellings will be able to compete with foreclosed bank and government homes for sale this year.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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