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New Homes Market Set to Compete with Foreclosures and HUD Homes

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By : John Cutts    99 or more times read
Despite the considerable number of foreclosed houses and HUD homes in various areas of Michigan, some markets are reportedly showing signs of revitalization. In the Southeast Michigan area, permits for home construction have risen by a huge margin and have exceeded the expectations of local homebuilders.

Grand Blanc repo houses and foreclosed dwellings in various areas of the state continued to rise last year. Apparently, this has not prevented homebuilders in some markets from engaging in new housing projects. Permits for housing starts in Southeast Michigan reportedly totaled 2,902 last year, up by 82% from 2009 when only 233 were issued in the area.

Foreclosures and repossession homes in Michigan notwithstanding, several markets in the southeast region are preparing for a boom in new home construction this year, judging from the number of residential permits issued to homebuilders in that part of the state. Last year, Macomb Township had 329 permits issued to builders, the highest number posted in the southeast community. Novi came in second at 181 while Clinton Township had 166.

Although cheaper foreclosed and HUD homes are still expected to pose tough competition on new dwellings, homebuilders are confident that the pick up in house construction activities will pave the way for a residential property market recovery this year, particularly in Macomb County. The county recorded the biggest percentage jump in housing starts last year in the southeast region, with the whole area issuing a total of 926 permits in 2010.

This represents a jump of 167% compared with 2009 when 347 permits were issued. Several other counties in the region posted increases that are more than 100%, with Livingston County coming behind Macomb with a 104% jump in terms of number of permits. According to housing market observers, this will help prices of dwellings in the region which have remained depressed in the past two years due to huge supplies of repossession houses listings and foreclosures.

Around 80% of housing permits issued in the southeast were reportedly for single family dwellings, but apartment and condominium development were also up from 2009 levels. Realtors stated that the unexpected increase in activities in these segments will help balance the impact of foreclosures and HUD homes in the region.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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