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Government Tax Foreclosure Homes Challenge Homebuilders

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By : John Cutts    99 or more times read
The huge supplies of bank and government tax foreclosure homes are contributing to the difficulties being experienced by the house construction sector in Florida. However, analysts stated that difficulties in acquiring financing for home building projects have proven to be more of a problem than the competition posed by foreclosed properties.

Orlando foreclosures continue to dominate the housing market in the area, but realtors are predicting that demand for more housing will escalate in 2011 as job creation expands in the state. According to housing market observers, the Orlando region, as well as other areas in Florida, is facing a potential shortage in residences, particularly multifamily housing units.

Real estate agents have stated that, despite the high number of Florida foreclosures in the state, a lot of residents are opting to live in apartments and rental homes. They stated that in a few years time, a shortage in apartment units will hit the Florida market. They claimed that home builders are currently finding it hard to accommodate the projected increase in demand, mainly because of difficulties in acquiring funds to start building projects.

Real estate experts have claimed that aside from the competition posed by bank foreclosed properties and government tax foreclosure homes, builders are also unable to push through with multifamily building projects because of lack of financing. The lack of multifamily structures in the Orlando area has resulted in higher rents and shortage of choices, analysts have added. They predicted that housing starts in the region will grow by 16% in 2011 to provide around 133,000 rental housing units.

However, analysts estimated that this will not be enough to cover the 250,000-300,000 units needed for the projected growth in demand. Despite the presence of low-priced foreclosures for sale and the expected addition of over 200,000 more units by 2012, the area is still reportedly facing a shortage in multifamily residences. Moreover, analysts are not just talking about simple apartments and residential properties, they are actually estimating future demands for affordable residences.

Experts reported that, although increased demand for housing units is good for the home building industry, it will not benefit builders much if they cannot construct units that residents can easily afford and can compete with the prices of bank foreclosures and government tax foreclosure homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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