Federal tax credits provided to first time homebuyers have come and gone. Sales of new houses increased in Atlanta, Georgia, during the first half of last year mainly due to the federal program, but home builders believe that even without a tax credit this year, 2011 will prove to be a strong period for the new home market.
Housing starts got held back last year by the huge supply of cheaper Atlanta distressed homes. Although housing starts in the metro region did post a 28% increase in 2010 compared with 2009, the total was still down by 78% from the 2006 peak period. For 2011, home builders stated that home buying activities in the new home arena will be better than 2010.
They did admit that the new housing industry will still find it difficult to compete with cheaper Georgia distressed properties, but they expect home buying activities within the segment to escalate, particularly at the latter part of the current year. They stated that, as the economy strengthens, buyers will gain more confidence and will soon start looking for new homes. They also stated that not a lot of home building has been done in the past two years because of the housing market crisis and the recession.
This means that there are fewer new houses out there, and once the demand picks up, home builders might have to scramble to meet the demand. This, analysts stated, can push the prices of new houses higher as existing supply might not be enough to accommodate the projected increase in demand. Analysts believe that even without federal tax credits, Americans will again embrace homeownership.
Housing experts stated that fixer upper listings and foreclosed properties will continue to account for a large percentage of metro area housing sales. However, they claimed that the gradual growth in the job market will provide more income and more willing buyers to the new housing market.
Most home builders believe that there are a lot of potential buyers out there that have the means to make a purchase even without the federal tax credits. It was just that consumer confidence has plummeted as the housing and economic downturn deepened in the past two years. This year, however, they believe that confidence among buyers is growing.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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