Home building permits issued in Connecticut during December 2010 declined by over 14% when compared with year-ago levels. Analysts have attributed the lack of activity in the sector to the huge supply of auction home foreclosures in the area. According to them, the bargained prices of foreclosed properties are taking a big chunk out of new houses' market share.
The number of foreclosure auctions in Stamford and in the rest of the state remained high in 2010. This, analysts stated, prevented the house construction market from securing more projects during the period. In December, permits fell by 14.3% in the whole state compared with the same 2009 month. However, full year figure did increase, with 2010 home permits rising by 7.9% compared with the full 2009 period.
Properties at Connecticut foreclosure auctions are said to be pulling demand for new homes down. Some of the state's local markets have posted considerable foreclosure jumps last year, with Norwich-New London being just one example. The area posted a total of 1,547 foreclosures last year, representing a 16.7% increase from 2009 levels. This gives the area a ratio of one household out of every 76 units under foreclosure last year.
With the increase in the number of auction home foreclosures in Norwich-New London, the metro area jumped higher in the national rankings of U.S. regions with the highest foreclosure rates. The metro ended at 126 last year, several steps higher than its 133rd ranking in 2009. Meanwhile, the metro area of Bridgeport-Stamford-Norwalk ended at number 102, while Hartford-West Hartford-East Hartford was at 135th.
Although the number of distressed properties, including HUD repo homes, in these metro areas was not as high as in other regions of the country, the metros still felt the impact of the foreclosure crisis, particularly in terms of new housing activities. Analysts stated that building permits for last year might have posted an increase when compared with 2009 levels, but they remain way below the average recorded during pre-crisis years.
Majority of housing industry observers expect auction home foreclosures to remain high in 2011. They also stated that as long as foreclosures are in oversupply, the new housing market will be hard put to keep up and any improvement in the sector this year will be very minimal.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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